2. Chapter 3. Supply and Demand Link to syllabus Skip discussions of substitutes and complements (p. 71), and of normal and inferior goods (p. 72).

3. Figure 3-1 p. 67. Demand Curve

4. Figure 3-2 p. 69. An Increase in Demand

5. Figure 3-3 p. 71. Movement Along the Demand Curve versus Shift of the Demand Curve

6. P. 71. Factors that Shift Demand Changes in the prices of related goods Changes in income Changes in tastes Changes in expectations Changes in the number of consumers Skip the conversations about substitutes and complements, normal and inferior goods.

7. Global Comparison: page 68 How gasoline satisfies the principle of demand – higher price, lower quantity demanded.

8. Figure 3-6 p. 76. The Supply Schedule and the Supply Curve

9. p. 79. Factors that Shift Supply Changes in input prices Changes in the prices of related goods Changes in technology Changes in expectations Changes in the number of producers Skip the conversation about substitutes and complements

10. Figure 3-11 p. 84. Market Equilibrium

11. Figure 3-12 p. 86. A Price above Equilibrium Creates a Surplus This discussion is continued in the next chapter

12. Figure 3-13 p. 87. A Price Below Equilibrium Creates a Shortage Continued in the next chapter.

13. 1) Distinguish between shift of a curve, and movement along a curve. (see pages 69, 77-78). 2) Talk about shifts to the right and to the left, not up and down. (can be misleading when referring to supply). 3) We will ignore downward sloping part of supply (falling costs, such would occur when there are economies of scale). That’s micro. m.t.’s comments about Supply and Demand Analysis