SUPPLYANDDEMANDWORKSHEET

PartI:Usethespacebelowtotakenotesonthebasicprinciplesofdemand.

Demand:

LawofDemand:

DemandSchedule:

DemandCurve:

PartII:

Usethechartbelowtoreplicatethedemandschedulewecreateinclass.

DemandScheduleforProduct:

PricePer Item	QuantityDemanded
$10	2
$8	4
$6	6
$4	8
$2	10

Createademand curvefor theproductbasedonthedemandschedule:PutpriceontheYaxisandquantity onthe X axis. Labelboth.Labelthedemand curve.

PartIII:

Whydoesademandcurveslopedownward?

When price fall the quantity demanded of a commodity rises and vice versa,

other things remaining the same. It is due to this law of demand that demand

curve slopes downward to the right. ... In other words, as a result of the fall inthe price of the commodity, consumer's income or purchasing power increases

Define:IncomeEffect: the income effect is the change

SubstitutionEffect:

Describeasubstitutioneffectscenariobasedonthedemandcurve above.

DefineChangeinQuantityDemanded:

Giveanexamplefromthedemandcurveaboveto illustratethis

DefineChangeinDemand:

Explainthe 6factorsthatcancauseachangeindemand1.

2.

3.

4.

5.

6.

Youjustwonthelottery.Drawanewdemandcurve(onyouroriginalcurve) toshowwhere

demandwillshift.Labelit"MoreIncome"

Youwerejusttoldthatyourproductwasmadewithtoxicmaterials.Drawanewdemandcurve(onyouroriginalcurve)toshowwheredemandwillshift.Labelit"ProductRejection"

DefineNormalGoods:

Giveanexample(otherthanwhatisinthebook)ofanormalgood

DefineInferiorGoods:

Giveanexample(otherthanwhatisinthebook)ofaninferiorgood

SUPPLY

PartIV:

Definethetermsbelowandfollow theinstructionslistedafterthevocabulary.

1. Supply:

1. Lawof Supply:

1. SupplySchedule:

1. SupplyCurve:

Usingthe product from yourdemandworksheet,wewillcreateasupplyscheduleusingthechartbelow.

Price	Quantity
10	10
8	8
6	6
4	4
2	2
0	0

Plot your supply curve using the information above on the same chart as you plotted your demand curve.Labelitsupply curve.

PartV:

1. Differentiatebetweenchangeinquantitysuppliedandchangeinsupply.

1. Whathappenstosupplywhenproductioncostsincrease?

1. Whathappenstoasupplycurvewhenachangeinsupplyoccurs?

Turnpage

1. Listanddescribethesixfactorsthatcauseachangeinsupply.a.

b.

c.

d.

e.

1. Anewbatteryforelectriccarshasbeen introduced.It willallowacartogo100 milesfartherthanthecurrentbatteries.
   1. Wherewillthesupplycurveforelectriccarsshift?Right orLeft (circle one)
   2. Thisindicates a(n)increaseordecreaseinsupply. (circleone)

1. Thegovernmenthasplaced ataxonthepurchaseofallhighsugarsoftdrinks.
   1. Wherewillthesupplycurveforhighsugarsoftdrinksshift?Right orLeft (circle one)
   2. Thisindicates a(n)increaseordecreaseinsupply.(circleone)