More income results in more demand for new cars; less demand for used cars Less income results in more demand for used cars; less demand for new cars. …

More demand for both new and used cars New Cars Used Cars

Future availability of milk If there is a suspected shortage of milk consumers will stock up now to avoid risk of not getting any.

If there is a price change where there is an introductory price (300 dollars for an iPhone 5) consumers will buy now to avoid risk of paying more later. If there is a price change where there will be a sale (back down to 300 dollars from 800 dollars for 1 week only!), consumers will buy now to avoid risk of paying more later.

Future income If we are coming out of a recession and consumers feel secure about their jobs = positive future income.

Future income If we are going into a recession and consumers don’t feel secure about their jobs = negative future income

Complement (Inverse) – Milk Substitute (Direct) – Pop Tarts Substitutes-Direct; Complements-Inverse …………………………

Wages and raw materials are resources If resource cost decreases – supply increases If resource cost increases – supply decreases

Substitutes in Production Producers want to produce more of the good where price is increasing, …or at least, where the price is not going down.

Because one person on a computer can produce more documents, offices don’t have to have as many secretaries.[saves $]

expect future oil prices to decline, they will increase current production. expect future oil prices to increase, they will decrease current production

A benefit given by the government to groups, companies or individuals usually in the form of a cash payment or tax reduction. The subsidy is usually given to remove some type of burden and is often considered to be in the interest of the public.

There are many forms of subsidies given out by the government, welfare, housing loans, student loans and farm subsidies. For example, if a domestic industry, like farming, is struggling to survive in a highly competitive international industry with low prices, a government may give cash subsidies to farms so that they can sell at the low market price but still achieve financial gain.

If business have their taxes decreased, it moves the supply curve to the right (INCREASE SUPPLY) If business have their taxes increased, it moves the supply curve to the left (DECREASE SUPPLY)