Week 3 — Demand

Why this matters

A small bakery owner watching a price change shorten the morning line and a city transit planner seeing a new apartment block add riders are both reading demand.

In plain language

This week is about what buyers want and how the price changes it. When something costs more, people tend to buy less of it, and when it costs less, they buy more. Economists call that pattern the law of demand (the rule that a higher price means a smaller amount wanted, with everything else held still). They write it down as a demand schedule (a table of prices and the amounts buyers want) and draw it as a demand curve (the same table as a picture). The big skill this week is telling two kinds of change apart: a price change that slides buyers along the curve, and a change in something else that moves the whole curve.

• Already covered: Week 1 taught scarcity, opportunity cost, and ceteris paribus; Week 2 showed why both sides gain from trade.
• This week: the law of demand, the demand schedule and curve, market demand, and a movement along demand versus a shift of demand.
• How they connect: the law of demand is a Week 1 model that holds everything but the price fixed.
• Where we're going next: Week 4, Supply & Market Equilibrium, adds sellers and finds the market price.

Focus

What do buyers want at each price, and what else changes what they want?

By the end of this module, you should be able to:

• [ ] build a demand schedule from a rule and describe its curve in words
• [ ] add buyers' quantities at one price to get market demand
• [ ] tell a change in quantity demanded from a change in demand
• [ ] name which way demand shifts for each determinant

To-do

Plan your week

1. Read Chapter 3 (35–45 minutes), then the lecture and slides.
2. Work the tutorial (60–90 minutes) and practice set (15–25 minutes).
3. Do the Model Workshop (90 minutes), discussion, and assignment.
4. Take the quiz.

This week's checkpoint: say whether a price fall from 6 to 5 dollars changes demand or quantity demanded, and why.

You've got this

Take it in order, and ask your instructor early.

Built with The Course Maker · samples.thecoursemaker.com