Demand
Jackson Hernandez
7 min read
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Study Guide Overview
This study guide covers the fundamentals of demand in AP Macroeconomics, including the difference between demand and quantity demanded. It explains the Law of Demand, the INSECT acronym for determinants of demand (Income, Number of Buyers, Substitutes, Expectations, Complements, and Tastes), and how these determinants shift the demand curve. It also provides practice multiple-choice and free-response questions focused on demand and its interaction with supply, along with key exam tips.
#AP Macroeconomics: Demand - Your Ultimate Review 🚀
Hey there! Let's get you prepped for the AP Macro exam. We're diving into demand, making sure you're not just memorizing, but understanding what's going on. Let's do this!
# Demand: The Basics
#What is Demand?
Demand isn't just about wanting something; it's about being willing and able to buy it at various prices. Think of it as a whole range of possibilities, not just one specific purchase.
#Demand vs. Quantity Demanded
Demand is the entire curve, showing how much people want at all possible prices. Quantity demanded is just one point on that curve, reflecting a specific price.
Imagine a demand curve like a slide. Demand is the entire slide, while quantity demanded is just one spot where you might be on the slide at a particular moment.
- Demand = The whole curve
- Quantity Demanded = A single point (A, B, or C)
# Law of Demand
The law of demand is a cornerstone of economics. It states that price and quantity demanded are inversely related.
- Price ⬆️, Quantity Demanded ⬇️ (People buy less when things get pricier)
- Price ⬇️, Quantity Demanded ⬆️ (People buy more when things get cheaper)
Think of it like this: if your favorite candy bar doubles in price, you probably won't buy as many, right? That's the law of demand in action!
- At point 🅱️, the price is $40 and the quantity demanded is 800 cans.
- At point 🅰️, the price increased to $60, and the quantity demanded decreased to 40...
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