Question

1. Economists use economic models to help them visualize and understand the complex situations found in economics. In a later chapter, you will learn about demand schedules and demand curves, but in this activity you will use these two economic models to learn how economists organize information. A demand schedule, shown below, is a table that shows the number of items, such as cupcakes, one person would buy at the price listed. As you can see, when the price of the item decreases, a consumer will buy (or demand) more quantities. Demand Schedule Price of Cupcake Quantity Demanded $10 $8 $6 $4 2 6 12 24 What does the demand schedule show about price and quantity demanded?​

Answer 1

The demand schedule shows the relationship between the price of a good and the quantity of that good that consumers are willing and able to buy at that price. As the price of the good decreases, the quantity demanded of the good increases, and vice versa. This inverse relationship between price and quantity demanded is known as the law of demand in economics. In the example demand schedule provided, as the price of cupcakes decreases from $10 to $2, the quantity demanded by consumers increases from 2 to 24. This means that at a higher price, consumers are willing to