Why We LOVE Demand! Economics 1
Let’s do some review! <ul><li>Law of Demand states what… </li></ul><ul><li>What is the difference between income effect an...
Shifts of the Demand Curve <ul><li>Ceteris paribus:  all other things held constant </li></ul><ul><li>A demand curve is ac...
Shifts <ul><li>A shift in the demand curve means that at every price, consumers buy a different quantity than before. </li...
Normal Goods <ul><li>Goods that consumers demand more of when their incomes increase. </li></ul><ul><li>Causes curves to s...
Inferior Goods <ul><li>An increase in income causes demand for these goods to fall. </li></ul><ul><li>Goods that you would...
Complements vs. Substitutes <ul><li>Two goods that are bought and used together </li></ul><ul><li>Goods used in place of o...
A Dreaded Disease <ul><li>Demand connects with “Market” decisions </li></ul><ul><li>Scarcity plays a role in Demand </li><...
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Why we love demand!

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Why we love demand!

  1. 1. Why We LOVE Demand! Economics 1
  2. 2. Let’s do some review! <ul><li>Law of Demand states what… </li></ul><ul><li>What is the difference between income effect and substitution? </li></ul><ul><li>Are we understanding schedules and graphs better?! </li></ul><ul><ul><li>The Demand Curve </li></ul></ul>
  3. 3. Shifts of the Demand Curve <ul><li>Ceteris paribus: all other things held constant </li></ul><ul><li>A demand curve is accurate only as long as there are not changes other than price that could affect the consumer’s decision! </li></ul>
  4. 4. Shifts <ul><li>A shift in the demand curve means that at every price, consumers buy a different quantity than before. </li></ul><ul><li>Other factors that can cause a change in demand… </li></ul><ul><ul><li>Income </li></ul></ul><ul><ul><li>Expectations </li></ul></ul><ul><ul><li>Population change </li></ul></ul><ul><ul><li>Tastes </li></ul></ul><ul><ul><li>Advertising </li></ul></ul>
  5. 5. Normal Goods <ul><li>Goods that consumers demand more of when their incomes increase. </li></ul><ul><li>Causes curves to shift to the right. </li></ul>
  6. 6. Inferior Goods <ul><li>An increase in income causes demand for these goods to fall. </li></ul><ul><li>Goods that you would buy in smaller quantities, or not al all, if your income were to rise and you could afford something better. </li></ul>
  7. 7. Complements vs. Substitutes <ul><li>Two goods that are bought and used together </li></ul><ul><li>Goods used in place of one another </li></ul>
  8. 8. A Dreaded Disease <ul><li>Demand connects with “Market” decisions </li></ul><ul><li>Scarcity plays a role in Demand </li></ul><ul><li>Economies deal with Demand in varied ways </li></ul>

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