What am I Learning Today? How and Why a Demand Curve Shifts. How Will I Show I Know It? A Worksheet to practice with.

A Term I Must Know ceteris paribus- literally translated as "with other things the same,"

What is the difference between change along the demand curve and a shift in demand?

Moving Along the Curve Looks Like This:

How do I put this in simple terms: Moving on the demand curve only deals with the price change. As the price changes, the quantity demand changes

Now To Add Something New: A Shift in the Curve

How I Do I Define This New Idea of A Shift in the Demand Curve

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The Definition A shift in the demand curve means at every price consumers will buy a different quantity than before.

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Demand changed due to other factors than price. Example: A massive cold snap hits Atlanta. I might not want to buy as many shakes from Brewsters. My demand for Brewster’s Ice Cream has changed, but their prices had no impact on why I changed my habit of buying a milk shake.

What Non Price Factors Can Move A Demand Curve? Income Consumer Expectations Population Consumer Tastes Prices of Related Goods

Income You buy things when you have money and don’t when you have none. There are two types of items that we buy.

Two Item Types Normal Good It is what we buy when we have more money. Example: Designer Clothes Expensive Car Name brand groceries

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Inferior Good What you buy when you have less money. Instead of name brand cereal, you buy then bags of generic cereal. Instead of Dr. Pepper, you by Dr. Thunder Instead of a new car, you buy a used car.

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Normal vs Inferior Good Normal New Car Sugar Puffs Dr. Pepper Steak Dinner Inferior Used Car Generic Wheat Puffs Dr. Thunder Romaine Noodles in a cup

Consumer Expectations What someone thinks can happen in the future. Salesperson mentions prices may go up. An item may go on sale. You might not buy something until it goes on sale.

Population As the number of people in an area increases, so does demand

Consumer Tastes Fads and Fashions

Prices of Related Goods Can Cause One Curve to Shift Another Products Curve

Compliments Two Goods that are bought and used together. Paint and paintbrush Toothbrush and toothpaste Ipod and earphones Peanut Butter and jelly

Substitutes Goods that can be used in place of another The price of coffee goes up, people will buy more tea. Price of movies go up, people may watch more DVDs

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