02 tues demand consumer surplus
-
Upload
travis-klein -
Category
Education
-
view
214 -
download
3
Transcript of 02 tues demand consumer surplus
Bellringer, As always, get out your notebookIn your notes: How much would you be willing to pay for this computer? (what would be the most
you would be willing to pay)
Write answers on board• Factors might change our answers?
• Reading assignment: Ch 4 Mankiw, due by Mon• Your choice: annotate & show me• OR on a paper, A.4 examples from real life of conceptsB.3 ways to test Mankiw’s ideas (simulations,
research)C.2 or more questions you have about the text
Today
• Topic: Law of Demand and Consumer Surplus
• Why important: It’s the consumption side of our economy
What is “demand”?
• The amount of a good or service that a consumer is willing and able to buy at various prices during a given time period
Create Demand Schedule
Price Quantity Demanded
Graph on boardShow proper labels
Proper Economics Supply/Demand Graph
Price$$$$P$
Quantity# of goods/serviceQ
TITLE: _______ ___ Market
You try one
Widget Demand Schedule
Price QuantityDemanded
5 10
4 17
3 26
2 38
1 53 Demand curve reason ?
D
Law of DemandLaw of Demand: As price declines, quantity demanded
increases. As price increases, quantity demanded decreases
Law of Demand: P Therefore Q demand P Therefore Q demand
Demand curve always slopes down
A linguistic problem
• Does P$ change the actual demand of a good?
• NO, P$ change only changes quantity demanded
• “thinking on the margin”
• Chicken exampleD
D
Consumer SurplusConsumer surplus is the difference between the
amounts people would willingly pay for various amounts of specific goods and the amounts they do pay at market prices.
Closure
• Tell your partner how large, if any, was your consumer surplus.
Demand Curves assignment
• Due start of class Friday• I won’t be here on Thurs, you will have an
in class reading, but rest of time to work