QUESTIONS FOR REVIEW 1 What determines the quantity of a good that buyers demand?
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Step 1: The quantity of a good that buyers demand is determined by the **demand curve**. Show more…
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Microeconomics Unit 2: Demand, Supply, and Consumer Choice Demand The Law of Demand: P↑ Qd ___ P↓ Qd ___ Supply The Law of Supply: P↑ Qs ___ P↓ Qs ___ What is the different between a change in quantity demanded and a change in demand? Changes in Demand and Supply (Shifting the Curve) What changes demand? (5 Shifters of Demand) What changes supply? (5 Shifters of Supply) Substitutes: Price of A↑ Demand for B ___ Price of A↓ Demand for B ___ Complements: Price of A↑ Demand for B ___ Price of A↓ Demand for B ___ Normal Goods: Income ↑ Demand ___ Income ↓ Demand ___ Inferior Goods: Income ↑ Demand ___ Income ↓ Demand ___ Equilibrium and Disequilibrium Draw a shortage Draw a surplus PRICE QUANTITY Government Involvement Price Ceiling- When binding, ceilings go _____ equilibrium and result in a _____ Price Floor- When binding, floors go _____ equilibrium and result in a _____ Subsidy- Supply and Demand Practice Demand Decrease Price ___ Quantity ___ Demand Increase Price ___ Quantity ___ Supply Decrease Price ___ Quantity ___ Supply Increase Price ___ Quantity ___ Double Shift Practice If demand increases AND supply increases then price ______ and quantity ______ Double Shift Rule:
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Analysis of Demand Directions: Below is the demand schedule for hamburgers. Use this demand schedule for activity 2.1 and 2.2. Price (peso per unit) | Quantity Demanded (units per week) 0 | 100,000 10 | 90,000 20 | 80,000 30 | 70,000 40 | 60,000 50 | 50,000 60 | 40,000 70 | 30,000 80 | 20,000 90 | 10,000 100 | 0 1. Graph the movement along the demand curve when the price of hamburgers falls from P/60 to P/40 per unit. Explain the movement of the demand curve. 2. Graph the shifts of the demand curve when the buyer would choose to buy 70,000 instead of 60,000 hamburgers at price P/40. Explain the shift of the demand curve. 3. The law of demand holds that people buy more at lower prices than at higher prices. But some goods are bought largely because they have "snob appeal." For example, some students in your school gain prestige by buying expensive brand name items. Does knowingly buying an item because it is expensive violate the law of demand?
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