Transcript Change in demand - Our Lady's College

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Economics Project
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1. Change in demand and quantity demanded
2. Goods
…….Meaning of change in
quantity demanded…..

Quantity demanded means the amount of goods that a person is willing and able to buy at a particular price.
 Change in quantity demanded is caused by a change in a good’s price, holding all other factors constant. It is
represented by a movement along the same demand curve.
~*~*Example of a change in quantity demanded~*~*

Assume a department store holds a summer sale; the price of
goods such as clothes may drop. The consumers will want to buy a
larger quantity at a lower price according to law of demand. The
quantity demanded for clothes will increase. It is represented by a
movement along the same demand curve. It is caused by a change in
its own price and not caused by a change in other factors. So it is a
case of change in quantity demanded.
Meaning of change in demand

Demand refers to the quantity demanded at all given
prices.

Change in demand means that the quantity demanded
change at every price. It is caused by a change in factors
(e.g. weather, income, etc.) other than a good’s own
price. It is represented by a shift of the entire demand
curve.
igA Example of a change in demand igA
 When the income of the people increases, demand for most of the
goods such as clothes increase. These goods are called normal goods
or superior goods. The demand curve for clothes will shift to the
right. However, when the income of the people increases, demand
for some goods such as rice decrease. These goods are called
abnormal goods or inferior goods. The demand curve for rice will
shift to the left. It is caused by a change in income, not by a change
in the goods’ own prices. So it is a case of change in demand.
HJFIEN
Goods
SPRWPWIV
 In Economics, goods refer to anything that can
satisfy human wants. Goods can be classified
by two methods.
 The first method is depending on how they are
used; goods can be classified into capital goods
and consumer goods.
 Capital goods & Consumer goods 
 Capital goods are the goods produced
for assisting the production of other goods.
Facsimile machines in office and tables in
restaurant are the examples of capital
goods.
Facsimile
machine

Consumer goods are the goods produced for direct consumption.
Tissue, telephone and television are the examples of consumer goods.
Telephone
Television
Tissue
Economic Goods and Free Goods A
A
 The second method is according to their quantities
relative to our wants, goods can be classified into
economic goods and free goods.

An economic good is any good that is insufficient to
satisfy all our wants, i.e. it is scarce. As people prefer to
have more of it, they are willing to pay for it, or give up
something to get it. The opportunity cost in production
is positive. Furniture, food and drinks are the examples
of economic goods.
Drinks
Ω
A free good is any good whose quantity is sufficient to satisfy all our
wants, i.e. it is not scarce. As people do not prefer to have more of it, they
will not pay for it. They need not to give up something to get it. The
opportunity cost in production is zero. Air and seawater are the examples of
free goods.
Seawater
Ω
In Hong Kong, some people will give you some goods that free of charge.
For example: tissue. Although they are free of charge, they are not free
goods, because people will prefer to have more of them and they are willing
and able to pay for them. Moreover, it is costly to produce them. So they are
economic goods. In conclusion, those goods that are free of charge may not
be free goods.
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The End
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Liz Chan
Joyce Fung
Nancy Ng
Tracy Ng