Transcript What am I Learning Today?

What am I Learning Today?
How and Why a Demand Curve Shifts.
How Will I Show I Know It? A Worksheet
to practice with.
A Term I Must Know
• ceteris paribus- literally translated as "with
other things the same,"
What is the difference between
change along the demand curve and
a shift in demand?
Moving Along the Curve Looks Like
This:
How do I put this in simple terms:
• Moving on the demand curve only deals with
the price change.
• As the price changes, the quantity demand
changes
Now To Add Something New: A
Shift in the Curve
How I Do I Define This New Idea of A
Shift in the Demand Curve
This is a picture
The Definition
• A shift in the demand curve means at every
price consumers will buy a different quantity
than before.
Are you here? Put simply…
Are you here? Put simply…
• Demand changed due to other factors than
price.
• Example: A massive cold snap hits Atlanta. I
might not want to buy as many shakes from
Brewsters. My demand for Brewster’s Ice
Cream has changed, but their prices had no
impact on why I changed my habit of buying a
milk shake.
What Non Price Factors Can Move A
Demand Curve?
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Income
Consumer Expectations
Population
Consumer Tastes
Prices of Related Goods
Income
• You buy things when you have money and
don’t when you have none.
• There are two types of items that we buy.
Two Item Types
Normal Good
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It is what we buy when we have more money.
Example:
Designer Clothes
Expensive Car
Name brand groceries
Are you here?
Inferior Good
• What you buy when you have less money.
• Instead of name brand cereal, you buy then
bags of generic cereal.
• Instead of Dr. Pepper, you by Dr. Thunder
• Instead of a new car, you buy a used car.
Still Here?
Normal vs Inferior Good
Normal
• New Car
• Sugar Puffs
• Dr. Pepper
• Steak Dinner
Inferior
• Used Car
• Generic Wheat Puffs
• Dr. Thunder
• Romaine Noodles in a cup
Consumer Expectations
• What someone thinks can happen in the
future.
• Salesperson mentions prices may go up.
• An item may go on sale. You might not buy
something until it goes on sale.
Population
• As the number of people in an area increases,
so does demand
Consumer Tastes
• Fads and Fashions
Prices of Related Goods Can Cause
One Curve to Shift Another Products
Curve
Compliments
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Two Goods that are bought and used together.
Paint and paintbrush
Toothbrush and toothpaste
Ipod and earphones
Peanut Butter and jelly
Substitutes
• Goods that can be used in place of another
• The price of coffee goes up, people will buy
more tea.
• Price of movies go up, people may watch
more DVDs
Are You Here?
Please tell me what you need me to go
over…