经济第一课 first class of economy the every first lesson

the first class of economy, including class requirements and introduction of economy exams

1. e7d195523061f1c0f0ec610a92cff745ee13794c7b8d98f8E73673273C9E8BE17CC3D63B9B1D6426C348A354AD505654C28F453CD7C8F90EADD06C08281DAED7140E5AAAED5880ECE414DFB6A93B82BE019406867034C3A8500A4827DCF3FBF74A471B736410707E336A01C9ADC9BE02ACCB8DF2121D81636A067B8AE80C6AB6F014154F4E7B7247 Economics Teacher: Ying Hu Building 8. 3rd Floor 2024

2. Syllabus: Demand The concept of ‘demand’. The distinction between movements along a demand curve and shifts of a demand curve The concept of diminishing marginal utility and its significance for the shape of the individual demand curve The factors that may cause a shift in the demand curve (the conditions of demand)

3. Starter Activity – imagine a hot day! How many would you buy that ice cream of $2 each on that hot day?

4. Starter Activity – imagine a cold day Now, h ow many would you buy that ice cream of $2 each on that cold day?

5. Demand is the quantity of goods or services that buyers are able and willing to buy at any given price over a period of time. Demand

6. Your first Demand Curve... On a piece of graph paper, plot the following information. Quantity on the X axis, price on the Y axis Using the information: What can you tell me about the relationship between price and demand. Price (£) Quantity demanded 2 100 4 80 6 60 8 40 10 20 Demand Schedule

7. My first Demand Curve Always make sure you correctly label the axis and the curves The demand curve is downward sloping showing the inverse relationship between price (on the y-axis) and quantity demanded (on the x-axis) The law of demand states that “as price increases, demand falls, and vice versa”

8. Utility = Satisfaction We buy goods because we get utility from them The law of diminishing marginal utility states that as you consume anything, the additional satisfaction that you will receive will eventually start to decrease. In other words, the more you buy of ANY GOOD the less satisfaction you get from each new unit consumed. Demand curves are downward sloping as each additional unit of a product or service is put toward a less valuable use. Law of Diminishing Marginal Utility

9. Law of Diminishing Marginal Utility

10. Law of Diminishing Marginal Utility

11. Movements along the demand curve quantity demanded quantity demanded

12. Q $5 4 3 2 1 Price of Milk Quantity of Milk Demand Schedule 10 20 30 40 50 60 70 80 Price Quantity Demanded $5 10 $4 20 $3 30 $2 50 $1 80 Demand What if milk makes you smarter? Shifts in demand curve

13. Shifts in demand curve Q $5 4 3 2 1 Price of Milk Quantity of Milk Demand Schedule 10 20 30 40 50 60 70 80 Price Quantity Demanded $5 10 30 $4 20 40 $3 30 50 $2 50 70 $1 80 100 Demand What if milk makes you smarter?

14. Price Quantity Demanded $5 10 30 $4 20 40 $3 30 50 $2 50 70 $1 80 100 Shifts in demand curve Q $5 4 3 2 1 Price of Milk Quantity of Milk Demand Schedule 10 20 30 40 50 60 70 80 Demand D 1 Increase in Demand Prices didn’t change but people want MORE Milk

15. Movements along and Shifts in demand curve Changes in Demand Changes in Quantity Demanded Change: all other things Change: price Shift the curve Move along the curve

16. What Causes a Shift in Demand? 5 Shifters (Determinants) of Demand: changes in the price of substitutes or complementary goods changes in real income changes in tastes changes in size and age distribution of the population advertising Changes in PRICE don’t shift the curve. They only cause movement along the curve.

17. Prices of Related Goods Complements are two goods that are bought and used together. Ex: If price of hot dogs falls, demand for hot dog buns will... If the price of one increase, the demand for the other will fall (or vice versa). Substitutes are goods used in place of one another. Ex: If price of Pepsi falls, demand for coke will… If the price of one increases, the demand for the other will increase (or vice versa). The demand curve for one good can be affected by a change in the price of ANOTHER related good.

18. Income Inferior Goods Ex: Top Ramen, used cars, used clothes As income increases, demand falls As income falls, demand increases Normal Goods Ex: Luxury cars, s ea f ood, jewelry, homes As income increases, demand increases As income falls, demand falls The incomes of consumers change the demand, but how depends on the type of good.

19. 1. Which of the following will cause the demand for milk to decrease? Increase in the price of a substitute A decrease in income assuming that milk is a normal good A decrease in the price of milk An increase in the price of milk A decrease in the price of a complementary good Practice Questions

20. 1.2. Which of the following will cause the quantity demanded of milk to decrease? Increase in the price of a substitute A decrease in income assuming that milk is a normal good A decrease in the price of milk An increase in the price of milk A decrease in the price of a complementary good Practice Questions

21. Syllabus: Demand The concept of ‘demand’. The distinction between movements along a demand curve and shifts of a demand curve The concept of diminishing marginal utility and its significance for the shape of the individual demand curve The factors that may cause a shift in the demand curve (the conditions of demand)