HOW MUCH WOULD YOU PAY 1 cow 3
- Slides: 15
HOW MUCH WOULD YOU PAY? 1 cow? 3 stocking hats? 1 bag of Jolly Ranchers? 2 tickets to Las Vegas? An A in economics ?
TOPIC 3 –DEMAND, SUPPLY AND PRICES
MICROECONOMICS Studies how the individual parts of the economy make decisions to allocate limited resources in markets where good or services are being bought and sold.
DEMAND Topic 3 – Lesson 3
WOULD YOU PAY $1 FOR A SLICE OF PIZZA? Demand – The desire to own something and the ability to pay for it Words to associate with demand: �Consumers
LAW OF DEMAND – INVERSE RELATIONSHIP As price decreases, demand increases As price increases, demand decreases
WHAT DO THE POINTS ON THIS GRAPH REPRESENT?
CHANGE IN QUANTITY DEMANDED Only a change in PRICE! Can move you along the demand curve This is called a CHANGE IN QUANTITY DEMANDED
IF SOMETHING OTHER THAN PRICE CHANGES… CHANGE IN DEMAND
5 FACTORS THAT SHIFT THE DEMAND Change in the Number of Buyers 1. Population, migration Change in values: Consumer Tastes 2. Trends, fads, good or bad reviews
5 FACTORS THAT SHIFT DEMAND CURVE 3. Change in values: Consumer Income Normal good…. demand more as income rises Inferior good…. demand less as income rises 4. Change in values: Price of other goods Compliments……. peanut butter and jelly prices Substitutes………. chicken or beef 5. Change in values: Expectations Will there be a sale soon?
ELASTICITY How responsive consumers are to price changes How much will a buyer cut back or increase their demand for a good when the price rises or falls?
Inelastic Demand for a good that you will keep buying despite a price increase. Price change has little impact on demand Ex: Gas, Cigarettes, Coffee, Medicine Elastic Demand is much less for a good after a small price increase. Price change has impact on demand Ex: Luxury Items
FACTORS AFFECTING ELASTICITY WHAT IS ESSENTIAL? WHAT GOODS MUST I HAVE, EVEN IF THE PRICE RISES GREATLY? Availability of substitutes � If there are few (ex. Concert ticket)? � If there are lots? Relative Importance � How much do you spend on a particular good? Necessities vs. Luxuries � Toothpaste? Calamari?
+ ELASTIC OR INELASTIC?
- How much does wanda earn per hour?
- Would like and would rather
- Base form
- Designing pay levels mix and pay structures
- Short term incentive
- Graduated commission examples
- Longrich investment plan
- It is unwise to pay too much
- Astronaut salary spacex
- Decaffeinated hot chocolate
- To whom much is given much is required meaning
- How much is too much plagiarism
- How much would it cost
- If you had studied hard you would have succeeded
- If you could see the future what would you do
- Jesus died buried and resurrected