Transcript 4.3 Changes in Demand Objectives

• Learning Objective:
– Today I will be able to identify what changes demand
by writing a summary about how I have contributed
to demand.
• Agenda:
1.
2.
3.
4.
5.
6.
Finish Worksheet (Elasticity of Demand)
Learning Objective
Lecture: Ch. 4.3 Changes in Demand
Vocabulary
Quiz—Review Quiz
Exit Slip
1
• Title Notes: Ch. 4.3 Changes in Demand
• Determinants of Demand Curve (Shifts the Curve):
1. Consumer income
2. The prices of related goods
3. Number & Composition of consumer goods
4. Consumer Expectations
5. Consumer Tastes
CONTEMPORARY ECONOMICS:
LESSON 4.3
2
• Increase of demand= rightward shift
– Consumers more willing & able
• 1. Changes in consumer income
– Normal goods: Consumption as income
– Inferior goods: consumption as income
• Less quality goods
– Ex. Frozen food, used car, used clothes, etc.
• 2. The prices of related goods
– Substitutes
•
Or of prices of substitutes shifts curve.
– Ex. Costco Pizza—Caeser’s Pizza
– Ex. Pizza--Tacos
– Complements
•
or of price of complements shifts
curve with it.
• Ex. Pizza & Soda—Chips & Salsa
3
Check for Understanding
1. Consumption of Normal Goods increases
when……..
2. What are inferior goods?
3. Inferior goods are purchased when…….
4. What is a substitute for Wing Stop?
– Perfect or imperfect substitute?
5. What are two products that complement
each other?
CONTEMPORARY ECONOMICS:
LESSON 4.3
4
• 3. Changes in the size or composition of the
population
– Size= population
• If pop. grows the # of consumers will increase.
– Composition= age group (specific group)
• Ex. Baby boomers demanded more baby car seats & baby
food---- and more schools.
CONTEMPORARY ECONOMICS:
LESSON 4.3
5
• 4. Changes in consumer expectations
– Future Income
• Ex. Work bonus, you spend more now because
you expect more money later.
– Future price
• Ex. If Price for houses is expected to increase,
then consumers will buy now (will shift the
demand curve)
• 5. Changes in consumer tastes
– Likes & Interests:
• food, music, clothing, reading, movies,
TV shows – indeed, all consumer
choices – are influenced by consumer
tastes.
• After economists have ruled other
determinants, they attribute shift of
curve to consumer tastes.
6
Check for Understanding
1. If composition OR population shows what
will happen to the demand curve????
2. What are TWO expectations consumers have
that shift the demand curve????
3. What are consumers tastes?
CONTEMPORARY ECONOMICS:
LESSON 4.3
7
Movement Along a Demand Curve VS. Shift of the Demand
Curve
• Causes of Movement
along D curve:
 A change in price,
 other things constant
 Changingquantity
demanded.
• Causes of Shift of D
Curve:
 A change in one of the
determinants, other
than price
 Changingdemand.
CONTEMPORARY ECONOMICS:
LESSON 4.3
8
Checking for Understanding
What are 5 determinants of demand, and how do changes in
each shift the demand curve?
The 5 determinants are
Consumer income – a rise in income causes an outward (increase)
shift of the DC
The price of related goods – a rise in this causes an outward
(increase) shift of the DC
Number of consumers in the market – a rise in this causes an
outward (increase) shift of the DC
Consumer expectations - a rise in this causes an inward (decrease)
shift of the DC
Consumer tastes - a rise in this causes an inward (decrease) shift of
the DC
CONTEMPORARY ECONOMICS:
LESSON 3.3
9
Check for Understanding
1. Curve moves along the demand curve when…….
– Changing…….
2. Curve shifts the demand curve when…..
– Changing……
CONTEMPORARY ECONOMICS:
LESSON 4.3
10
Extensions of Demand Analysis
• Role of time in demand
– The cost of consumption has
two components:
• the money price of the good
and (price of good)
• the time price of the good
(value of a good that works
faster & more convenient)
• The cost of waiting in line
– The opportunity cost is not
doing something else.
CONTEMPORARY ECONOMICS:
LESSON 4.3
11
Checkpoint: pg.123
What’s the difference between the money price of the good
and its time price?
1. Money price is how much a good costs.
2. Time price is the monetary value you place on
having a good that works faster or is more
convenient.
CONTEMPORARY ECONOMICS:
LESSON 3.3
12
Vocabulary
• Work on vocabulary INDEPENDENTLY!
– NO TALKING
– Headphones allowed
• Ch. 4 Vocabulary
• Ch. 5 Vocabulary
CONTEMPORARY ECONOMICS:
LESSON 4.3
13
Quiz
CONTEMPORARY ECONOMICS:
LESSON 4.3
14
Exit Slip
• In what ways do you think you have
contributed to the shift of the Demand Curve?
CONTEMPORARY ECONOMICS:
LESSON 4.3
15