1. Basic Economic Concepts
Supply and Demand
Purpose: Identify changes in events that will result in a change in demand.

2. I. Goals Correctly label and graph a demand curve and shift.
Identify an increase and decrease in demand.
Identify the determinants of demand and their effect on the shifting of the demand curve.

3. IV. Determinants of Demand
Will either increase or decrease quantity demanded regardless of price
Changes in Income
Consumer Expectations
Changes in Population
Tastes and Preferences
Prices of Related Goods

4. IV. Determinants of Demand
Changes in Income:
Income affects our demand for products
Normal Goods
Goods that are demanded more when income rises
Ex. Cheerios
Inferior Goods
Goods that are demanded less when income rises
Ex. Toasty O’s (generic brand)
Recession and boom

5. C. Determinants of Demand
Consumer Expectations:
Expectations about the future can impact demand
TVs just before black Friday
Demand shifts downward
Demand for school supplies just before late July and August

6. C. Determinants of Demand
Changes in Population:
An increase in the amount of people leads to higher demand for a given product

7. C. Determinants of Demand
Taste and Preferences:
Cannot be totally explained, but demand for products shift depending upon the tastes of the population
frozen

8. C. Determinants of Demand
Prices of Related Goods:
Demand for one good can be effected by a change in demand for another good.
Complimentary Goods
Goods generally purchased and consumed together.
Ex. Salt and Pepper
Substitute Goods
Goods used in place of another good.
Ex. Oranges and apples