Download Section 2 Lecture

AP Macroeconomics
Section 1 Lecture
September 16, 2016
Mr. Gammie
The Market
Demand
Key Terms
• Quantity Demanded
– The actual amount of a good or service consumers
are willing and able to buy at some specific price
willing AND able
Demand Schedule
Price per Coffee
Quantity Demanded per Week
$5
50
$4
100
$3
150
$2
200
$1
250
The Law of Demand
• Other things being equal, as the price
increases, the corresponding quantity
demanded falls.
Key Concept
A change in quantity demanded vs. a change in
demand.
Qd = price of that good!
Demand = everything else!
Practice Questions
1. All of the following would decrease demand
for the latest furry boots except:
a.
b.
c.
d.
e.
The price of shoes goes down
People prefer boots without fur
The price of the furry boots goes up
People expect the boots to go out of style soon
The weather forecast is for a very warm winter
Practice Questions
2. A decrease in the price of toothpaste in a tube can
lead to a decrease in purchases of toothpaste in a
pump. This means:
a. The are substitute goods and the demand curve for
toothpaste in a tube will shift to the right.
b. They are complementary goods and the demand curve
for toothpaste in a tube will shift to the right.
c. They are substitute goods and the demand curve for
toothpaste in a pump will shift to the left.
d. They are complementary goods and the demand curve
for toothpaste in a tube will shift to the left.
e. They are complementary goods and the demand curve
for both products wills shift to the left.
Practice Questions
3. Suppose that the Canadian Food Inspection Agency has
written an article stating green tea reduces heart disease
and many illnesses. What might be the immediate effect
seen in the economy?
a.
b.
c.
d.
e.
The demand for green tea would increase, forcing the price to
go up.
The quantity demanded for green tea would increase, forcing
the price to go up.
The quantity supplied for green tea would increase, forcing the
price to go up.
The supply of green tea would increase, forcing the price to go
down.
The quantity supplied for green tea would go down, forcing
the price to go up.