Lesson 3.1 Fundamentals of Demand
Key Terms
Demand-
law of demand-
substitution effect-
income effect-
demand schedule-
market demand schedule-
demand curve-
Academic Vocabulary
Alternative: an available choice
Vertical: running up and down
Horizontal: running side to side
Demand: Text
1. Draw Inferences Read the definition of demand presented in the section “Demand.” Why do you think both of these factors must be present in order to have true demand?
2. Compare and Contrast After reading the sections “The Substitution Effect” and “The Income Effect,” compare and contrast the substitution effect and the income effect.
The Demand Schedule: Text
3. Compare and Contrast Look at Figure 3.1. How are individual and market demand schedules similar? How are they different?
4. Determine Central Ideas Read the sections “Understanding Demand” and “Market Demand Schedules.” Which do you think would be most important to the owner of a business?
The Demand Graph: Text
5. Vocabulary: Use Context Clues Read the first paragraph under “The Demand Graph.” What do you think the phrase graphic representation means?
6. Summarize Complete this table based on what you have read in this lesson.
Lesson 3.2 Shifts in Demand
Define Key Terms
ceteris paribus-
normal good-
inferior good-
demographics-
complement-
substitute-
nonprice determinant-
Academic Vocabulary
Assumption: a belief or idea taken to be true
Expectation: a belief that an event or development will occur in the future
Generic: not having a brand name
Changes in Demand: Text
1. Cite Evidence Read the first paragraph under “Changes in Demand.” Was the person’s change in demand for a burger in this situation based on price or on some other factor?
The Non-Price Determinants of Demand: Text
2. Categorize What are non-price determinants, and why are they given that name? Give some examples.
3. Summarize As you read through this lesson, complete this web diagram about what causes demand curves to shift.
4. Identify Cause and Effect After reading the section “Changes in Income,” explain how changes in income affect the demand for normal goods.
5. Draw Inferences Think about normal goods and inferior goods. Give an example of normal and inferior goods that are also substitutes.