Learning Objective: Agenda: Today I will be able to identify what changes demand by writing a summary about how I have contributed to demand. Agenda: Finish Worksheet (Elasticity of Demand) Learning Objective Lecture: Ch. 4.3 Changes in Demand Vocabulary Quiz—Review Quiz Exit Slip

CONTEMPORARY ECONOMICS: LESSON 4.3 Title Notes: Ch. 4.3 Changes in Demand Determinants of Demand Curve (Shifts the Curve): Consumer income The prices of related goods Number & Composition of consumer goods Consumer Expectations Consumer Tastes CONTEMPORARY ECONOMICS: LESSON 4.3

2. The prices of related goods 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

Check for Understanding Consumption of Normal Goods increases when…….. What are inferior goods? Inferior goods are purchased when……. What is a substitute for Wing Stop? Perfect or imperfect substitute? What are two products that complement each other? CONTEMPORARY ECONOMICS: LESSON 4.3

CONTEMPORARY ECONOMICS: LESSON 4.3 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

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.

Check for Understanding If composition OR population shows what will happen to the demand curve???? What are TWO expectations consumers have that shift the demand curve???? What are consumers tastes? CONTEMPORARY ECONOMICS: LESSON 4.3

CONTEMPORARY ECONOMICS: LESSON 4.3 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

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

Check for Understanding Curve moves along the demand curve when……. Changing……. Curve shifts the demand curve when….. Changing…… CONTEMPORARY ECONOMICS: LESSON 4.3

Extensions of Demand Analysis  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

Checkpoint: pg.123  Money price is how much a good costs. What’s the difference between the money price of the good and its time price? Money price is how much a good costs. Time price is the monetary value you place on having a good that works faster or is more convenient. CONTEMPORARY ECONOMICS: LESSON 3.3

CONTEMPORARY ECONOMICS: LESSON 4.3 Vocabulary Work on vocabulary INDEPENDENTLY! NO TALKING Headphones allowed Ch. 4 Vocabulary Ch. 5 Vocabulary CONTEMPORARY ECONOMICS: LESSON 4.3

CONTEMPORARY ECONOMICS: LESSON 4.3 Quiz CONTEMPORARY ECONOMICS: LESSON 4.3

CONTEMPORARY ECONOMICS: LESSON 4.3 Exit Slip In what ways do you think you have contributed to the shift of the Demand Curve? CONTEMPORARY ECONOMICS: LESSON 4.3