Summary and Final Tasks

In this lesson, we introduced the concept of a market system, and our core tool for analysis of markets, the supply and demand diagram.

We examined in detail the origins and underpinnings of one half of this market model: the demand curve.

At this point, you should be able to perform the following tasks:

• Explain what a market-based economy is, and what the most common alternative form of economic organization is.
• Define and understand what is meant by the term, "declining marginal utility."
• Identify the parts of a supply and demand diagram.
• Read an individual demand schedule and use it to draw an individual demand curve.
• Understand that a demand curve is a functional relationship between two things: the quantity of goods (Q) that is demanded by consumers at a given price (P). Demand is not a constant, but a line that has changing Q for changing P.
• Amalgamate individual demand curves to obtain a market demand curve.
• Understand what the term "price elasticity of demand" refers to.
• Be able to calculate a price elasticity of demand.

Graded Assessment

If you log in to Canvas, you will find a short written quiz for lesson 2. Complete that by the date noted on the calendar tab in Canvas.

There will also be a new discussion forum topic posted this week.

Have you completed everything?

You have reached the end of Lesson 2! Double check the list of requirements on the first page of this lesson to make sure you have completed all of the activities listed there.