1. Read the excerpt on the next page from Principles of Economics. Pick out the technical reading elements.

a. Do you see a description of a process? If so, where?

b. Do you see cause-and-effect reasoning? If so, where?

c. Do you see specialized vocabulary of the discipline? If so, which terms? Are the terms defined in the text so that you understand what they mean?

d. Look at the graphic closely. Interpret the graphic and explain how you read it.

Transcribed Image Text:

DEMAND To an economist, the term demand-whether the demand for tickets or the demand for roses-has a very specific meaning. Demand is a relationship between two economic variables: (1) the price of a particular good and (2) the quantity of that good that consumers are willing to buy at that price during a specific time period, all other things being equal. For short, we call the first variable the price and the second variable the quantity demanded. The phrase all other things being equal, or ceteris paribus, is appended to the definition of demand because the quantity that consumers are willing to buy depends on many other things besides the price of the good; we want to hold these other things constant, or equal, while we examine the relationship between price and quantity demanded. Demand can be represented by a numerical table or by a graph. In either case, demand describes how much of a good consumers will purchase at each price. Consider the demand for bicycles in a particular country, as presented in Table 1. Of course, there are many kind of bicycles-mountain bikes, racing bikes, children's bikes, and inexpensive one-speed bikes with cruiser brakes-so you need to simplify and think about this table as describing demand for an average, or typical, bike. PRICE $140 $160 $180 $200 $200 QUANTITY PRICE DEMANDED QUANTITY DEMANDED 18 $240 5 14 $260 3 11 $280 2 9 7 $300 1 Table 1 Demand Schedule for Bicycles (millions of bicycles per year) Observe that as the price rises, the quantity demanded by consumers goes down. If the price goes up from $180 to $200 per bicycle, for example, the quantity demanded goes down from 11 million to 9 million bicycles. On the other hand, if the price goes down, the quantity demanded goes up. If the price falls from $180 to $160, for example, the quantity demanded rises from 11 million to 14 million bicycles. ... The law of demand says that the higher the price, the lower the quantity demanded in the market; and the lower the price, the higher the quantity demanded in the market.