CHAPTER 4

DE

MA

ND

CH 4 S

ECTION 1

WH

AT

IS

DE

MA

ND

?

VOCABULARY

Demand

Microeconomics

Demand schedule

Demand curve

Law of Demand

Market demand curve

Marginal utility

Diminishing marginal utility

NOTES

1. What is the relationship between the demand schedule and the demand curve?

2. How is the slope of the demand curve explained by the principle of diminishing marginal utility?

ASSIGNMENT TO TURN IN

List 5 things you bought in the last week and answer these questions for each item

1. Would you have purchased the item if the price were doubled?

2. Would you have tried to find another brand at a lower price?

3. Would you have bought more of the product if the price had been half as much? Why or why not?

CH 4 S

ECTION 2

F AC

TO

RS

AF F E

CT

I NG

DE

MA

ND

VOCABULARY

Change in quantity demanded

Income effect

Substitution effect

Change in demand

Substitutes

complements

NOTES

1. What is the difference between change in quantity and change in demand?

2. How does the change in price affect the change in demand for a product’s substitute?

CH 4 S

ECTION 3

EL A

ST

I CI T

Y O

F DE

MA

ND

VOCABULARY

Elasticity

Demand elasticity

Elastic

Inelastic

Unit elastic

NOTES

1. What are the 3 determinants of demand elasticity?

2. Why is the demand for items like medicine inelastic?

3. Why do items that have close substitutes have an elastic demand?

ASSIGNMENT TO TURN IN

List the items in the chart on page 106 and explain why each is elastic or inelastic.