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Individual Demand
We begin to understand how market forces work by looking more closely at the behavior of a single market participant. Let us start with Tom, a freshman at Clearview College. Tom is experiencing the problem of writing a paper for his English composition class. To make matters worse, Tom’s professor has insisted on typed papers and Tom cannot type with his fingers much better than he can write with his toes. Under the circumstances, Tom is desperate for a typist.
Although it is clear that Tom has a strong desire for a typist, his demand for typing services is not yet evident.A demand exists only if someone is willing and able to pay for the goods ----- that is, exchange dollars for goods or services in the marketplace. Is Tom willing and able to pay for typing?
Let us suppose that Tom has some income and is willing to spend some of the it to get his English paper typed. Under these suppositions, we can say that Tom is a participant in the market for typing services.
But can we say anything about his demand? Surely Tom is not prepared to exchange all his income for the typing of a single English paper. After all, Tom could use his income to buy more desirable goods and services, to give up everything for the typing of just one paper would imply an extremely high opportunity cost. It would be more reasonable to assume that there are limits to the amount Tom is willing to pay for any given quantity of typing. These limits will be determined by how much income Tom has to spend and how many other goods and services he must give up in order to pay for typing services. If the price of typing goes over these limits, Tom may end up typing all or part of the paper himself.
1. Tom is now___________________.
a. happy with writing a paper
b. experienced in writing a paper
c. experiencing the problem of torment of writing a paper
d. writing a paper for his classmate
2. Tom ____________.
a. types very poorly
b. can write with his toes
c. can type with his fingers as well as with his toes
d. can type very well
3. Tom is desperate for a typist. This sentence means that______________.
a. Tom losses his hope of finding a typist
b. Tom is in extreme need of a typist
c. Tom doesn’t want a typist any more
d. Tom has a hatred for a typist
4. A demand exists_______________________________-.
a. when someone is willing to pay even if he hasn’t any money
b. when anyone is able to pay although he is not willing to pay
c. when someone is willing and able to pay for something
d. when a desire for a typist is apparent
5.Tom is not prepared to exchange all his income for the typing of a single English paper, because_____________________ .
a. it would imply an extremely high opportunity cost
b. his income is rather small
c. money is more desirable
d. his income has limits