1. 1. Consumer Income
Consumer Income – The amount of money a consumer has can affect their willingness to purchase certain items.
Examples:
Normal good – Express For Men (Name Brand) Inferior good – Wal-Mart Brand (Generic Brand)   

2. Normal Good
Inferior Good

3. Consumer Income P D D1 QD P D1 D QD

4. Consumer Income P D1 D QD P D1 D QD

5. 2. Price of Related Goods
Price of related goods – demand for goods can be affected by the price for related goods
Examples:
Complements - Iphone and Case Substitutes - Gatorade and Powerade   

6. Complementary ProductsQD P D D1 QD

7. Substitute Products P D QD P D QD

8. SHIFTS in the Demand Curve
Price of Related Goods
SUBSTITUTES
$1.25 D D 2 25 10
Less coffee is demanded at $1.25

9. SHIFTS in the Demand Curve
Price of Related Goods
SUBSTITUTES
$1.25 D 2 D 25 40
More coffee is demanded at $1.25

10. SHIFTS in the Demand Curve
Price of Related Goods
COMPLIMENTS
$1.25 D 2 D
What if the price of donuts went down? 25 40
More coffee is demanded at $1.25

11. SHIFTS in the Demand Curve
Price of Related Goods
COMPLIMENTS
$1.25 D D 2
What if the price of donuts went up? 25 10
Less coffee is demanded at $1.25

12. 3. Consumer Tastes
Consumer Tastes and Advertising – changes in popularity changes the “dollar vote” of the consumer
Examples:
Popularity decreases - 80’s band Poison
Popularity increases - Drake   

13. Consumer Tastes P
D1 D QD P D D1 QD

14. SHIFTS in the Demand Curve
Change in Preferences
$1.25 D 2 D
What if you began to enjoy coffee more than before? 25 40
More coffee is demanded at $1.25

15. SHIFTS in the Demand Curve
Change in Preferences
$1.25 D D 2
What if you started to get sick of drinking coffee? 25 10
Less coffee is demanded at $1.25

16. 4. Consumer Expectations
Consumer Expectations – the way people anticipate changes in products, technology or the economy
Example:
Iphone 5 to the Iphone 10 Changes in body styles of cars   

17. Consumer Expectations
D1 D QD P D D1 QD

18. SHIFTS in the Demand Curve
Expectations
$1.25 D
What if you knew there was going to be a sale on coffee next week? D 2 25 10
Less coffee is demanded at $1.25

19. SHIFTS in the Demand Curve
Expectations
LAST
DAY
$1.25 D 2
What if you knew that a sale on coffee were ending tonight? D 25 40
More coffee is demanded at $1.25

20. 5. Number of Buyers (Population)
Population – an increase/decrease in the number of consumers Increase in population - Georgia Florida weekend, Super Bowl, Olympics Decrease in population - Detroit, loss of 1 million people  

21. Number of Buyers (Population)D D1 QD P D D1 QD

22. The Determinants of Demand
Consumer Income
Tastes
Expectations
Price of Related Goods
Population

23. Difference Between Movement (Change in Quantity Demanded) and a Shift (Change in Demand)
QD (Movement) - A change in the amount a consumer will purchase as a result of a change in price
Ceteris paribus – all other things constant, all things remaining the same
Reflected as movement along the curve
D (Shift) – A change in the amount a person will buy as a result of an outside factor (change in ceteris paribus - popularity of product, consumer income, etc.), not having to do with price
Reflected as a shift
P P
a a
$100 $100 b D b D
$10
$10 10
100 QD 10
100 QD

24. Analysis of the Beef Market
Headline
Demand Shift?
(Y/N)
Does the curve shift
Left/Right? Or did it cause movement along the curve?
Increase/Decrease
in Demand, or Change in Quantity Demanded?
New
Curve (A or C), or N/A.
Determinant(s) of
Demand (Income, Population, Price of Related Product, Expectations, Tastes) or
Not Applicable.
1. Millions of Immigrants
Swell U.S. Population
Yes
Right
Increase C
Population
2. The Price of a lb. of
Beef Doubles No
Movement QD
N/A
N/A (price)
3. Consumer Income for
U.S. consumers falls for
3rd straight month
Left
Decrease A
Income
4. Surgeon General Warns
That Eating Beef is Hazardous to Your Health
Tastes/Expectations

25. Yes Right Increase C Expectations Left Decrease A No Movement QD N/A
Headline
Demand Shift?
(Y/N)
Does the curve shift
Left/Right? Or did it
cause movement along the curve?
Increase/Decrease
in Demand, or
Change in Quantity Demanded?
New
Curve (A
or C), or N/A.
Determinant(s) of
Demand (Income,
Population, Price of Related Product, Expectations, Tastes) or Not Applicable.
5. Price of Beef to Rise
Next Month
Yes
Right
Increase C
Expectations
6. Price of Beef to Fall
Left
Decrease A
7. The Price of lb. of Beef
falls by 50% No
Movement QD
N/A
N/A (price)
8. Free Buns With Every
lb. of Beef at Local
Publix
Related goods

26. Flow Chart – Determinants of Demand
What Causes a Shift?
Consumer Income
Consumer Expectations
Population
Consumer Tastes and Advertising
Price of Related Goods
Example of Increase Demand An individual gets a an increase in income. Increase in demand for name brand
products; decrease
for generic.
Example of Increase Demand If an individual expects price of
the bike to rise in the future, their demand will increase today.
Example of Increase Demand Return of soldiers from WW2 led to a baby boom, which increased demand for baby products.
Example of Increase Demand Bell-bottomed jeans
were at one time very popular.
Example of Increase Demand Snowboards will experience an
increase in demand if the price of skis goes up, making the two goods substitutes.
Example of Decrease Demand An individual’s
Example of Decrease Demand
If an individual expects the price of the bike to go down in the future then their demand will decrease today.
Example of Decrease Demand If a population decreases, then their will be a decrease in demand for housing,
automobiles, food, etc.
Example of Decrease Demand
Any product that goes out of style can be affected by consumer tastes and a decrease in demand.
Example of Decrease Demand
Ski boots are considered complements for skis. If Ski boots are too expensive, demand for skis will decrease.
income goes down. Decrease in
demand for name brand products; increase in demand for generic.

27. Review with Colander
QUIZ

28. Analyzing Demand Headlines (pkt)
Changes in Demand (pkt)