Demand you Da-man

1
Demand you Da-man

• DEMAND-Always refers to the buyer/consumer of a
  product.

2

• Supply and Demand Song

3
Money Cant buy me love

• Link

4
Lyrics

• Can't buy me love, love Can't buy me love I'll
  buy you a diamond ring my friend if it makes you
  feel alright I'll get you anything my friend if
  it makes you feel alright 'Cause I don't care
  too much for money, money can't buy me love
  I'll give you all I got to give if you say you
  love me too I may not have a lot to give but
  what I got I'll give to you I don't care too
  much for money, money can't buy me love Can't
  buy me love, everybody tells me so Can't buy me
  love, no no no, no Say you don't need no
  diamond ring and I'll be satisfied Tell me that
  you want the kind of thing that money just can't
  buy I don't care too much for money, money can't
  buy me love

5

• Does money have any intrinsic value? What are the
  functions of money? How does demand for money
  affect its supply? How do you think the supply of
  money versus the supply of diamonds has changed
  since the since the Beatles wrote this song?
  What's the reason for the difference? Although
  money cant buy love, money can buy a diamond
  ring. How does the money supply change today if
  you pay for the diamond ring with credit as
  opposed to a debit card?

6
Supply and Demand

• Song

7

• My boss he's a probable bore.Put me hands and
  knees on scrubable floor.Do it right receive the
  lions share bliss.Know all too well just where
  that ration is.Learned a lot about the company
  doe.Learned less about receiving it though.Saw
  how it came to those who always sat pretty.Don't
  need it.Supply and demand.My girl had a
  probable cause or so she said and took a probable
  pause.I was dumped for occupying her time.I
  asked her why and what was next in line.She said
  "Shiny hair that's my life ambitionbut I'll
  devote my time to a new omission the
  rizzle-razzle kitsch of paranoid city".Don't
  need it.Supply and demand.Supply and demand.

8

• Draw a supply and demand diagram that shows the
  boss receiving the lions share bliss while
  someone who scrubs floors gets much less. In
  other words, what factors would affect supply and
  demand such that CEOs receive 300 times the
  compensation of average workers? Are CEOs paid
  too much?

9
Demand Curve always looks like this. You can look
at it as going down. What do you notice about the
relationship between price and quantity?
10
THE LAW OF DEMAND (Memorize this)
AS PRICES GO UP PEOPLES DEMAND FOR PRODUCT GOES
DOWN AS PRICES GO DOWN PEOPLES DEMAND FOR
PRODUCT GOES UP.
11
The Demand Curve The Relationship between Price
and Quantity Demanded

• Demand Schedule
• The demand schedule is a table that shows the
  relationship between the price of the good and
  the quantity demanded.

12
DEMAND SCHEDULE
Price
Quantity
10 9 8 7 6
1 2 3 4 5
13
Catherines Demand Schedule
14
The Demand Curve The Relationship between Price
and Quantity Demanded

• Demand Curve
• The demand curve is a graph of the relationship
  between the price of a good and the quantity
  demanded.

15
Figure 1 Catherines Demand Schedule and Demand
Curve
Price of
Ice-Cream Cone
3.00
2.50
2.00
1.50
1.00
0.50
0
1
2
3
4
5
6
7
8
9
10
11
Quantity of
12
Ice-Cream Cones
16
Shifts in the Demand Curve

• Change in Quantity Demanded
• Movement along the demand curve.
• Caused by a change in the price of the product.

17
Changes in Quantity Demanded
A tax on sellers of ice-cream cones raises the
price of ice-cream cones and results in a
movement along the demand curve.
Price of Ice-Cream Cones
A
1.00
D
0
8
Quantity of Ice-Cream Cones
18
A PRICE CHANGE ALSO KNOWN AS A MOVEMENT ON THE
CURVE OR LIKE DAY LIKES TO SAY A DOT TO DOT
Price
QD
Notice the price is going down so what happens to
the quantity demanded
5
4
D1
10
20
Quantity
19
Price can also go up. What happens to Quantity
Demanded?
Notice the price is going up so what happens to
the quantity demanded
5
4
7
25
Quantity
20
DOT TO DOTS

• PRICE CHANGES ARE ALWAYS MOVEMENTS ON THE CURVE.
• EXAMPLE SOMETHING GOES ON SALE!!!!
• ARROW GOES UP OR DOWN BASED ON WHAT THE PRICE IS
  DOING!!!!!

21

Important Note- This is what the graph looks like
only if the PRICE of the product has
changed!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
Price
QD
D1
Quantity
PRICE CHANGE!!!!!!!!!!!!!!!!!!!!!!
22
So you have learned what a price change looks
like now lets look at something else.

• Shifts in Demand!!!!!!!!!!!!!!!!!! These are when
  people want to buy or not buy a product for any
  other reason besides the price changing!!!!!!!!!!!
  !!

ANY OTHER REASON
23
Price Change Change in Demand
Price
QD
D1
Quantity
D
Price
d1
d2
Quantity
24
QD Vs Change in D

• To help reveal the difference, I draw a graph
  relating the time that a student spends preparing
  for an exam to his expected grade. It shows that,
  generally speaking, as a student studies more, he
  makes a better grade, i.e., one moves along the
  curve. Now, I ask the students what would happen
  if they somehow came into possession of a copy of
  the exam. They respond, naturally, that they
  would probably be able to make a higher grade
  than before given the same amount of study time.
  In other words, the function shifts.

25
Shifts in the Demand Curve

• Change in Demand
• A shift in the demand curve, either to the left
  or right.
• Caused by any change that alters the quantity
  demanded at every price.

26
This product more people want to buy but not
because the price went down. Look at the price
and Quantities
Notice the price stayed the same
D
Price
5
d2
d1
6
10
Quantity
27
When the curve shifts it is called a Change in
Demand.

• There are certain things that will make the
  demand curve shift. These are called the
  determinants of demand.

D
Price
d1
d2
Quantity
28
Shifts in the Demand Curve

• Consumer income
• Prices of related goods/complimentary and
  substitute goods.
• Tastes
• Expectations
• Number of buyers

29
Expectations

• College students are often a poor down-trodden
  lot who must pinch pennies to get by and often
  subsist for most of their college careers on
  oatmeal or macaroni and cheese. They have to walk
  around in old rags. (Playing up the poverty of
  students gets sympathetic attention!) They endure
  this extreme deprivation until the last semester
  of their senior year. Then they start to apply
  for jobs and go to interviews. You can easily
  tell who is doing well in the job search process,
  they are the students who go out for pizza and
  beer and who begin to sport flashy new clothes!
  You can also distinguish between majors,
  accounting and computer science majors with high
  expectations will go out for pizza frequently,
  philosophy majors perhaps once or twice! Why does
  this occur? It is because good interviews give
  students confidence that in a few months their
  era of poverty will draw to a close. It is not
  necessary to even receive their first paycheck
  for these students to begin to alter their
  consumption patterns. Most have some slight
  reserve of cash, and the mere expectation of fat
  checks in a few months is enough to loose the
  bands on their coffers. Those without any nest
  egg may be inclined to borrow a bit, knowing that
  repayment will be easy. Budding accountants and
  systems analysts can, of course, be more prodigal
  since the size of the paycheck they anticipate is
  substantially fatter than that expected by the
  average philosophy major. Expectations of the
  future are a broad and powerful demand shifter
  not limited to expectations of future prices of a
  specific good.

30
6 shifts-Determinants of Demand you must memorize
this!!!

• CTCONSUMER TASTE- What people THINK
• CI-CONSUMER INCOME- How much money people have
• SUBSTITUTE GOOD-SG- Good that is bought instead
  of another good-example COKE AND PEPSI
• COMPLIMENTARY GOOD-CG- Goods that are bought
  together like PB AND JELLY
• BUYERS-B-The number of potential customers.
  More people more demand and vice versa
• EXPECTATIONS-E-Anticipation of something
  happening.

31
Figure 3 Shifts in the Demand Curve
Price of
Ice-Cream
Cone
Quantity of
0
Ice-Cream Cones
32
Market Demand versus Individual Demand

• Market demand refers to the sum of all individual
  demands for a particular good or service.
• Graphically, individual demand curves are summed
  horizontally to obtain the market demand curve.

33
The Market Demand Curve
The market demand at 2.00 will be 7 ice-cream
cones.
When the price is 2.00, Nicholas will demand 3
ice-cream cones.
When the price is 2.00, Catherine will demand 4
ice-cream cones.
The market demand curve is the horizontal sum of
the individual demand curves!


Nicholass Demand
Catherines Demand
Market Demand
Price of Ice-Cream Cone
Price of Ice-Cream Cone
Price of Ice-Cream Cone
2.00
2.00
2.00
1.00
1.00
1.00
13
7
3
5
4
8
Quantity of Ice-Cream Cones
Quantity of Ice-Cream Cones
Quantity of Ice-Cream Cones
When the price is 1.00, Catherine will demand 8
ice-cream cones.
The market demand at 1.00, will be 13 ice-cream
cones.
When the price is 1.00, Nicholas will demand 5
ice-cream cones.
34
Shifts in the Demand Curve

• Consumer Income
• As income increases the demand for a normal good
  will increase.
• As income increases the demand for an inferior
  good will decrease.

35
Consumer Income Normal Good
Price of Ice-Cream Cone
3.00
An increase in income...
2.50
Increase in demand
2.00
1.50
1.00
0.50
D2
D1
Quantity of Ice-Cream Cones
2
1
3
4
5
6
7
8
9
10
12
11
0
36
Consumer Income Inferior Good
Price of Ice-Cream Cone
3.00
2.50
An increase in income...
2.00
Decrease in demand
1.50
1.00
0.50
D1
D2
Quantity of Ice-Cream Cones
2
1
3
4
5
6
7
8
9
10
12
11
0
37
Shifts in the Demand Curve

• Prices of Related Goods
• When a fall in the price of one good reduces the
  demand for another good, the two goods are called
  substitutes.
• When a fall in the price of one good increases
  the demand for another good, the two goods are
  called complements.

38
Table 1 Variables That Influence Buyers
39
EXAMPLES-get a board and marker

• COKE GOES OFF SALE!!!!
• COKE-STOCK MARKET CRASHES!!!! CAUSING A GREAT
  DEPRESSION!!!
• COKE- PEPSI GOES OFF SALE
• COKE-CHIPS GO ON SALE
• COKE-CHINA GOES BANKRUPT AND ALL THE PEOPLE
  IMMIGRATE TO THE UNITED STATES!!!!!!!!
• COKE-EXPECT THE PRICE OF COKE TO GO
  DOWN!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
• COKE-GOES ON SALE GRAPH COKE AND PEPSI DONT

40
Graph Coke is bad for you.
D
d2
41
GRAPH COKE-PEPSI IS FOUND TO BE BAD FOR YOU
D
D2
D1
42
LOTS OF NEW PEOPLE IMMIGRATE TO UNITED STATES
D
D2
D1
43
PEPSI GOES ON SALE GRAPH COKE AND PEPSI
P
P
QD
D
D1
D2
COKE
Q
Q
PEPSI
44
CHIPS RAISE THEIR PRICE GRAPH COKE AND CHIPS
D1
D2
CHIPS
COKE
45
COKE CAUSES CANCER
P
D
D1
D2
Q
46
examples

• Coke goes off sale
• Coke- and pepsi go on sale graph both
• Coke-Lebron James advertises for coke graph coke
  and Pepsi
• Coke- Govt cuts consumer taxes

47
Lets Move on to SUPPLY

• Supply is always looked at from the
  manufacturer/seller/producer of a product.

48
The curve looks like it goes up!Thus sUPply
Price
Quantity
49
SUPPLY

• Quantity supplied is the amount of a good that
  sellers are willing and able to sell.
• Law of Supply
• The law of supply states that, other things
  equal, the quantity supplied of a good rises when
  the price of the good rises.

50
The Supply Curve The Relationship between Price
and Quantity Supplied

• Supply Schedule
• The supply schedule is a table that shows the
  relationship between the price of the good and
  the quantity supplied.

51
Bens Supply Schedule
52
The Supply Curve The Relationship between Price
and Quantity Supplied

• Supply Curve
• The supply curve is the graph of the relationship
  between the price of a good and the quantity
  supplied.

53
Figure 5 Bens Supply Schedule and Supply Curve
Price of
Ice-Cream
Cone
3.00
2.50
2.00
1.50
1.00
0.50
Quantity of
0
1
2
3
4
5
6
7
8
9
10
11
12
Ice-Cream Cones
54
Market Supply versus Individual Supply
0

• Market supply refers to the sum of all individual
  supplies for all sellers of a particular good or
  service.
• Graphically, individual supply curves are summed
  horizontally to obtain the market supply curve.

55
Shifts in the Supply Curve
0

• Input prices
• Technology
• Expectations
• Number of sellers

56
5 SUPPLY SHIFTS

• PRODUCTION/TECHNOLOGY-PT-YOU HIRE BETTER EDUCATED
  WORKERS/OR MACHINES TO RUN IN THE FACTORY.
• COST OF INPUTS-COI-COSTS OF PRODUCTION-WAGES-GAS-.
  
• EXPECTATIONS-IF THE COST OF ALUMINUM IS GOING TO
  RISE-
• GOVERNMENT-POLLUTION-
• OF SELLERS-THIS IS WHERE YOU LOOK AT IT FROM A
  MACROECONOMIC STANDPOINT!!!

57
Shifts in the Supply Curve
0

• Change in Quantity Supplied
• Movement along the supply curve.
• Caused by a change in anything that alters the
  quantity supplied at each price.

58
Change in Quantity Supplied
0
Price of Ice-Cream Cone
S
C
A rise in the price of ice cream cones results in
a movement along the supply curve.
A
1.00
Quantity of Ice-Cream Cones
1
5
0
59
Shifts in the Supply Curve
0

• Change in Supply
• A shift in the supply curve, either to the left
  or right.
• Caused by a change in a determinant other than
  price.

60
Figure 7 Shifts in the Supply Curve
0
Price of
Ice-Cream
Cone
7
20
Quantity of
0
5
12
Ice-Cream Cones
61
Table 2 Variables That Influence Sellers
0
62
So Just like demand you have different
scenariosPrice Change or Shift in Supply
P
QS
P
S2
S
S1
Q
Q
63
SOFT DRINK INDUSTRYCOKE GOES OUT OF BUSINESS
S2
S1
S
6
8
15
64
AN EXAMPLE OF A Product going on sale from
producers standpoint.
P
QS
1.00
.50
Q
100
25
65
AN EXAMPLE OF A PRICE CHANGE FOR SUPPLY
P
QS
1.00
.50
Q
100
25
66

• WE HIRE A BUNCH OF HIGH SCHOOL DROP OUTS.

S2
S1
67

• GOVERNMENT TELLS COKE POLLUTE THE RIVER WE DONT
  CARE.

Why would they produce more?
S1
S2
3
10
25
68
MORE EXAMPLES

• ALUMINUM PRICES GO UP(GRAPH COKE)

S2
S1
69
MORE EXAMPLES

• MINIMUM WAGE GOES UP GRAPH COKE!( GRAPH TWO OF
  THEM!!
• COKE LOWERS ITS PRICE GRAPH IT FROM A SUPPLIER
  AND CONSUMER STANDPOINT
• Coke raises its price-graph both
  curves!!!!!please get it right!!!

70
COKE LOWERS PRICE SHOW BOTH
71
COKE-ROBOTS BREAK IN OUR FACTORY AND DESTROY STUFF
72
COKE-GAS PRICES CONTINUE TO RISE
73
COKE-GOVERENMENT- MINIMUM WAGE IS NOW 8 DOLLARS
s2
s1
74
COKE-COKE EXPECTS ALUMINUM PRICES TO GO UP
s1
s2
75
GRAPH MINUTE MAID ORANGE JUICE-FREEZE KILLS
TREES!!!!
76
GRAPH OIL-THE PRICE OF OIL GOES UP!!!!!!!!!!!!
QS
77
Get Board and Markers and get started. I know you
did it yesterday. It is good practice.

• 1. Show 100 people wanting coke for 2 dollars.
• 2. Show coke producing 200 cokes for 3 dollars.
• 3. Show coke producing 300 cokes for 4 dollars
  and then the price going up to 5 dollars and them
  producing 600.
• 4. Show 1000 people wanting ipods at 50 dollars
  and then their price going up to 299 and 200
  people wanting them.
• 5. Show 1000 people wanting ipods at 200 dollars
  and then they are found to cause cancer so only
  100 people want them.

78
Get Board and Markers and get started.

• 6. Show what happens to the Demand for Apples if
  they are found to fight cancer.
• 7. Show what happens to the Demand for Gasoline
  if a Hurricane is heading toward us.
• 8. Show what happens to the Production of a
  Chemical Plant if the Govt cuts restriction on
  pollution.
• 9. Show what happens to the Demand for Coach Days
  tutoring as the Test Approaches.
• 10. Show what happens to the Supply of Dogs if
  the price of dogs goes up?

79
Get Board and Markers and get started.

• 11.Show what happens to the Demand for Dogs f the
  Price of Dog food quadruples?
• 12. The Ipad is a huge success! Graph the
  consumers perspective.
• 13. Show what happens to the Demand for Cars if
  the govt lowers the Legal driving Age.
• 14. Show what happens to the Demand for Beer if
  the govt raises the legal drinking age.
• 15. Show what happens to the demand of diapers if
  there is an influx of new immigrants.

80

• 16. Show what happens to the demand for
  Flashlights if a hurricane is expected.
• 17. Graph the demand for Coke and Pepsi if coke
  goes on Sale.
• 18. Graph the supply of Coke and Pepsi if they
  both raise their prices.
• 19. Graph the Demand for Coke and Pepsi if they
  both lower their prices.
• 20. What is the Law of demand.
• 21. Graph Orange Juice and Oranges. What happens
  to the production if insects destroy most of the
  crop?
• 22. Graph Production of Tshirts if-cotton prices
  go up?

81

• 23. Graph Production of Tables and Chairs if Wood
  becomes more expensive.
• 24. Graph consumption of Tables and Chairs if
  tables go on sale.
• 25. Graph consumption of Cliff notes towards the
  end of a semester?
• 26. Graph Production and Consumption of coke if
  it goes on sale.
• 27. Graph Demand for Guns if the president tries
  to restrict them?
• 28. Graph the production of Guns if the price
  goes up?
• 29. Graph consumption Tami-flu if the swine flu
  breaks out again.

82

• 30 What is the Law of Supply?
• 31. When do you use QS
• 32. When do you use just S
• 33. When do you use QD
• 34. when do you use D

83

• 35. List the 6 things the shift the demand curve.
• 36. List the 5 things that shift the Supply curve.

84
Practice

• Cars Trucks
• Mexico 1000 2000
• USA 300 300
• 37.AAC
• 38.AAT
• 39.CAC
• 40.CAT
• 41.What does it cost Mexico to make 1 truck?
• 42.Who imports Cars?

85
Practice

• Cars Trucks
• Mexico 50hr 200hr
• USA 50hr 500hr
• 43.AAC
• 44.AAT
• 45.CAC
• 46.CAT
• 47.What does it cost Mexico to make 1 truck?
• 48.Who imports Cars?

86

• 49. Graph Equilibrium
• 50. Graph a surplus.
• 51. Graph a shortage.
• 52. Graph Coke-Demand is 100 and supply is 50?
• 53. Graph Coke-Demand is 100 and Supply is 200.

87

• Opportunity Cost of going from B to C?
• 2. Most Baseballs that can be made?
• 3. What about point D?
• 4. What do we know about points A, B, C?

88
5. Opportunity Cost of going from A to C?6. What
about Point D?7. What is opportunity cost of
going from B to F?
89
CAFÉ EQUILIBRIUM

• SUEPLY AND DEMAN FINNALY MEET AT EQUILIBRIUM. HOW
  SWEET NOW EVERYONE IS HAPPY.
• CONSUMERS HAVE ENOUGH PRODUCTS AND SUPPLIERS HAVE
  SOLD ALL THAT THEY HAVE MADE

90
SUPPLY AND DEMAND TOGETHER

• Equilibrium refers to a situation in which the
  price has reached the level where quantity
  supplied equals quantity demanded.

91
SUPPLY AND DEMAND TOGETHER

• Equilibrium Price
• The price that balances quantity supplied and
  quantity demanded.
• On a graph, it is the price at which the supply
  and demand curves intersect.
• Equilibrium Quantity
• The quantity supplied and the quantity demanded
  at the equilibrium price.
• On a graph it is the quantity at which the supply
  and demand curves intersect.

92
SUPPLY AND DEMAND TOGETHER
Demand Schedule
Supply Schedule
At 2.00, the quantity demanded is equal to the
quantity supplied!
93
Figure 8 The Equilibrium of Supply and Demand
Price of
Ice-Cream
Cone
0
1
2
3
4
5
6
7
8
9
10
11
12
13
Quantity of Ice-Cream Cones
94

• Song link

95

• I work all night, I work all day, to pay the
  bills I have to payAin't it sadAnd still there
  never seems to be a single penny left for
  meThat's too badIn my dreams I have a planIf I
  got me a wealthy manI wouldn't have to work at
  all, I'd fool around and have a ball...Money,
  money, moneyMust be funnyIn the rich man's
  worldMoney, money, moneyAlways sunnyIn the
  rich man's worldAha-ahaaaAll the things I could
  doIf I had a little moneyIt's a rich man's
  worldA man like that is hard to find but I
  can't get him off my mindAin't it sadAnd if he
  happens to be free I bet he wouldn't fancy
  meThat's too badSo I must leave, I'll have to
  goTo Las Vegas or MonacoAnd win a fortune in a
  game, my life will never be the same...Money,
  money, moneyMust be funnyIn the rich man's
  worldMoney, money, moneyAlways sunnyIn the
  rich man's worldAha-ahaaaAll the things I could
  doIf I had a little moneyIt's a rich man's
  worldMoney, money, moneyMust be funnyIn the
  rich man's worldMoney, money, moneyAlways
  sunnyIn the rich man's worldAha-ahaaaAll the
  things I could doIf I had a little moneyIt's a
  rich man's worldIt's a rich man's world

96

• Draw a supply and demand diagram that shows the
  boss receiving the lions share bliss while
  someone who scrubs floors gets much less. In
  other words, what factors would affect supply and
  demand such that CEOs receive 300 times the
  compensation of average workers? Are CEOs paid
  too much?

97
Equilibrium

• Surplus
• When price gt equilibrium price, then quantity
  supplied gt quantity demanded.
• There is excess supply or a surplus.
• Suppliers will lower the price to increase sales,
  thereby moving toward equilibrium.

98
Figure 9 Markets Not in Equilibrium
(a) Excess Supply
Price of
Ice-Cream
Cone
0
Quantity of
Ice-Cream
Cones
99
Equilibrium

• Shortage
• When price lt equilibrium price, then quantity
  demanded gt the quantity supplied.
• There is excess demand or a shortage.
• Suppliers will raise the price due to too many
  buyers chasing too few goods, thereby moving
  toward equilibrium.

100
Figure 9 Markets Not in Equilibrium
(b) Excess Demand
Price of
Ice-Cream
Cone
0
Quantity of
Ice-Cream
Cones
101
Equilibrium

• Law of supply and demand
• The claim that the price of any good adjusts to
  bring the quantity supplied and the quantity
  demanded for that good into balance.

102
Table 3 Three Steps for Analyzing Changes in
Equilibrium
103
Figure 10 How an Increase in Demand Affects the
Equilibrium
Price of
Ice-Cream
Cone
0
Quantity of
Ice-Cream Cones
104
Three Steps to Analyzing Changes in Equilibrium

• Shifts in Curves versus Movements along Curves
• A shift in the supply curve is called a change in
  supply.
• A movement along a fixed supply curve is called a
  change in quantity supplied.
• A shift in the demand curve is called a change in
  demand.
• A movement along a fixed demand curve is called a
  change in quantity demanded.

105
Figure 11 How a Decrease in Supply Affects the
Equilibrium
Price of
Ice-Cream
Cone
Initial equilibrium
Quantity of
0
Ice-Cream Cones
106
Table 4 What Happens to Price and Quantity When
Supply or Demand Shifts?
107

• Economists use the model of supply and demand to
  analyze competitive markets.
• In a competitive market, there are many buyers
  and sellers, each of whom has little or no
  influence on the market price.

108

• The demand curve shows how the quantity of a good
  depends upon the price.
• According to the law of demand, as the price of a
  good falls, the quantity demanded rises.
  Therefore, the demand curve slopes downward.
• In addition to price, other determinants of how
  much consumers want to buy include income, the
  prices of complements and substitutes, tastes,
  expectations, and the number of buyers.
• If one of these factors changes, the demand curve
  shifts.

109

• The supply curve shows how the quantity of a good
  supplied depends upon the price.
• According to the law of supply, as the price of a
  good rises, the quantity supplied rises.
  Therefore, the supply curve slopes upward.
• In addition to price, other determinants of how
  much producers want to sell include input prices,
  technology, expectations, and the number of
  sellers.
• If one of these factors changes, the supply curve
  shifts.

110

• Market equilibrium is determined by the
  intersection of the supply and demand curves.
• At the equilibrium price, the quantity demanded
  equals the quantity supplied.
• The behavior of buyers and sellers naturally
  drives markets toward their equilibrium.

111
THE GRAPH TO COPY
112
LETS SPY ON THEM
P
S1
EQUILIBRIUM
EQUILIBRIUM PRICE 100
D1
EQUILIBRIUM QUANTITY 100
Q
113
HYBRID CARS IF OIL PRICES CONTINUE TO RISE!!!
P
S1
EP1 100
D2
D1
EQ1 100
Q
114
EP AND EQ WILL SUFFICE!!!!!!!
P
Q
115
LETS PRACTICE COKE CAUSES CANCER
S1
P
D
EP2
D1
D2
Q
EQ2
116
ALUMINUM PRICES GO UP GRAPH COKE
P
S1
S2
EP2
D1
EQ2
Q
117
COKE RAISES ITS PRICE
SURPLUS OF COKE
S1
1.50
How many Buyers?
50
1.00
IF COKE RAISES ITS PRICE THEY WILL MAKE MORE COKE
BUT LESS PEOPLE WILL BE BUYING IT BECAUSE THE
PRICE WENT UP
How many made?
150
D1
50
150
118
COKE LOWERS ITS PRICE
How many will be made?
50
Therefore you have a shortage of coke!
1.00
.50
How many want to buy it?
150
100
150
50
119
ORANGES FREEZE GRAPH SUPPLY AND DEMAND!!!!
s2
ep2
eq2
120
Coke causes cancer
p
s
1.00
d
q
100
121
Coke causes cancer
p
s
1.00
ep2
d
d2
q
100
eq2
122
Gasoline- Hurricane Wipes out some of the
Gasoline Refineries
p
s
1.00
Ep
d
eq
q
100
123
Gasoline- Hurricane Wipes out some of the
Gasoline Refineries
s2
p
s
s
ep2
1.00
Ep
d
eq
q
100
eq2
124
Gas-China has a billion People and they are all
starting to get cars
p
s
1.00
Ep
d
eq
q
100
125
Gas-China has a billion People and they are all
starting to get cars
p
s
D
1.00
Ep
d2
d1
eq
q
100
126
Gas-China has a billion People and they are all
starting to get cars. But they keep the price the
same
p
s
D
1.50
What should the price go too?
1.00
Ep
d2
1.50
100 is made and 500 are needed
So there is a shortage
IF price is still 1.00 how much is wanted and how
much is made?
d1
eq
q
500
100
127
Supply and Demand Together Forever
p
surplus
s
2.00
1.00
Ep
d
eq
q
50w
100
150m
128
Astros T shirts if they are in the world series
p
s
20
Ep
d2
d1
eq
q
100
129
Gasoline!!!! When a hurricane starts coming
towards you!!!!
p
s
10
2.80
Ep
d2
d1
eq
q
100
500
130
Gasoline!!!! When a hurricane starts coming
towards you! But because of no price gouging law
prices must stay the same what will happen?
p
s
10
2.80
Ep
d2
d1
eq
q
100
500
131
Supply and Demand Together Forever
p
s
1.00
Ep
d
eq
q
100
132
DIAMONDS

• WHAT IF I TOLD YOU THAT THERE ARE JUST AS MANY
  DIAMONDS IN THE WORLD AS EMERALDS. How could you
  explain why diamonds are more expensive. Graph
  it!!!!

133
AP Packet Questions

• LOD-21B,33B,25C
• SD-5,17,20,33,34,45,47,50, 12A,2B,48B,20A,5B,41C
• INFERIOR NORMAL GOOD-21A,4B,4C,,40C
• SD BOTH MOVE4A,32A,3B,28C

134
10 E-B, C
S2
PEACHES NEW TECHNOLOGY
135
NECTARINES
D2
136
MORE EXAMPLESORANGES-WE HIRE A BUNCH OF LAZY
WORKERS SHOW EPS AND EQS
137
ORANGE GROWERS GET REALLY MAD AND FEEL
UNDERAPPRECIATED AND DECIDE TO RAISE THEIR PRICES
150
50
150
138
AFTER A REVOLT AT HEB THE ORANGE GROWERS DECIDE
THEIR PRICES ARE TO HIGH AND DECIDE TO LOWER THEM
50
150
139
ORANGES-APPLES GO ON SALE GRAPH ORANGES
140
ORANGES-APPLES GO ON SALE BUT THEY DONT CHANGE
THE PRICE
D2
50
141
ORANGES-WE GET BETTER EQUIPMENT TO PICK ORANGES
WITH
142
THE GRAPH TO COPY
143
(No Transcript)
144
AP Packet Questions

• LOD-21B,33B,25C
• SD-5,17,20,33,34,45,47,50, 12A,2B,48B,20A,5B,41C
• INFERIOR NORMAL GOOD-21A,4B,4C,,40C
• SD BOTH MOVE4A,32A,3B,28C