3. Selling Quantity Price Demanded $ 3 $ 2 $ 1 $ 4 10 25 40 60 15 $ 5

4. Price Quantity $6 $5 $4 $3 $2 $1 10203040 50 60 0 Demand Downsloping left -Plot the points Graphing: -Connect the dots to right Demand

5. The demand by all the consumers of a given good or service.

6. Substitution effect The change in the quantity demanded of a good that results from a change in price, making the good more or less expensive relative to other goods that are substitutes. Income effect The change in the quantity demanded of a good that results from the effect of a change in the good’s price on consumers’ purchasing power.

7. Selling Quantity Price Old New 0 $ 3 $ 2 $ 0 $ 1 $ 4 1 $ 6 3 4 6 5 2 $ 5 1 3 4 6 5 2 7 0 1 3 4 5 2 DecInc Caused by a Change in a Determinant Movement OF the curve

8. Price Quantity $6 $5 $4 $3 $2 $1 1234 5 6 0 Old Increase in Demand shifts out or to the right Decrease in Demand shifts in or to the left

9. 1 Why the curve shifts 2 3 4 5 Consumer Incomes Price of Other Goods Consumer Tastes Number of Consumers Consumer Expectations

10. 1 Consumer Incomes +tax cuts increase net incomes Consumers have more money to spend, demand increases -the $ depreciates against the Euro Imported goods from Europe cost more dollars, demand decreases For Normal Goods!!! Or why the curve shifts

11. -the $ depreciates against the Euro Domestic travel looks better, demand increases For Inferior Goods Consumers switch to better goods, demand for Hot Dogs decreases +tax cuts increase net incomes

12. 2 Price of Other Goods If airlines cut ticket prices More demand for Luggage Less demand for train tickets

13. Tickets and Luggage are compliments Airlines and Trains are Substitutes If ticket prices decrease, demand for Luggage increases If ticket prices increase, demand for Luggage decreases If air tickets increase, demand for Train tickets also increases Compliments are consumed or used together (inverse relationship) Substitutes replace each other (direct relationship)

14. 3 Consumer Tastes - beanie hats make a comeback Demand increases -Hula Hoops go out of style Demand decreases

15. 4 Number of Consumers (also Demographics) -Hurricanes around Labor Day Fewer tourists touring Florida and the Gulf Coast, demand decreases More tourists touring, NC and SC, demand increases

16. 5Consumer Expectations - dealers reduce car prices in August Car buyers wait, demand decreases - heavy rains have damaged coffee crop Consumers expect shortages and higher prices so they buy more now, demand increases

17. 1 Why the curve shifts 2 3 4 5 Consumer Incomes Price of Other Goods Consumer Tastes Number of Consumers Consumer Expectations

18. Consumers responding to a Change in the Price of the good Caused by factors related to production of the good Harder or costlier to produce, price goes up Movement ALONG the curve Quantity $6 $5 $4 $3 $2 $1 1234 5 6 0 Demand Supply Curve Current Price Price P Q decrease increase Easier or less expensive to produce, price goes down What makes the Supply Curve Shift?? P1P1 P2P2 P3P3 Q2Q2 Q1Q1 Q3Q3 The Supply Schedule!! What makes the Supply Curve Shift??

19. A Change in Demand versus a Change in Quantity Demanded Price falls from $700 to $600, then movement along the demand curve from A to B—an increase in quantity demanded from 3 million tablets to 4 million tablets. If consumers’ incomes increase, the demand curve will shift to the right—an increase in demand. In this case, the increase in demand from D 1 to D 2 causes the quantity of tablet computers demanded at a price of $700 to increase from 3 million tablets at point A to 5 million tablets at point C.

24. Selling Quantity Price Supplied $ 3 $ 2 $ 1 $ 4 60 25 15 10 40 $ 5

25. Price Quantity $6 $5 $4 $3 $2 $1 10203040 50 60 0 Upsloping right -Plot the points Graphing: -Connect the dots to left Supply

26. Selling Quantity Supplied Price Old New 6 $ 3 $ 2 $ 1 $ 4 5 $ 6 3 2 1 4 $ 5 7 5 4 2 3 6 4 3 1 0 5 2 DecInc Caused by a Change in a Determinant Movement OF the curve

27. Price Quantity $6 $5 $4 $3 $2 $1 1234 5 6 0 Old Increase in Supply shifts out or to the right Decrease in Supply shifts in or to the left

28. 1 Resource Prices Why the curve shifts 2 Changes in Technology 3Prices of other goods Taxes and Subsidies 6 4Number of Producers Producer Expectations 5

29. 1 Resource Prices - gas is discovered under CVCC Supply increases -Minimum wage goes up Supply decreases Or why the curve shifts

30. 2 Changes in Technology + If a more powerful computer is developed Makes production easier (and cheaper) - If stronger pollution controls are required Makes production harder (and costly)

31. 3Prices of other goods Shift resources away from high production cost goods. Caused by natural disasters or market price of other goods

32. 4Number of Producers -fewer firms decrease supply +more firms increase supply

33. 5Producer Expectations - if prices are expected to increase, more production about prices and resource availability - if prices are expected to decrease, less production

34. + subsidies encourage production Taxes and Subsidies - taxes discourage production 6

35. Response to a Change in the Price of the good Caused by factors related to consumers Movement ALONG the curve Quantity $6 $5 $4 $3 $2 $1 1234 5 6 0 Supply Current Price Price P1P1 P2P2 P3P3 Q2Q2 Q1Q1 Q3Q3

36. 1 Resource Prices Why the curve shifts 2 Changes in Technology 3Prices of other goods Taxes and Subsidies 6 4Number of Producers Producer Expectations 5

37. A Change in Supply versus a Change in Quantity Supplied If price rises from $500 to $600, there will be movement up the supply curve from point A to point B—an increase in quantity supplied by Apple, Toshiba, Samsung, and the other firms from 5 million to 6 million tablets. If the price of an input decreases, that causes sellers to supply more of the product at every price, the supply curve will shift to the right—an increase in supply. In this case, the increase in supply from S 1 to S 2 causes the quantity of tablet computers supplied at a price of $600 to increase from 6 million at point B to 8 million at point C.

42. Selling Quantity Price Demanded Supplied $ 3 $ 2 $ 1 $ 4 10 25 40 60 15 $ 5 60 25 15 10 40 $ 3 25

43. Price Quantity $6 $5 $4 $3 $2 $1 10203040 50 60 0 D -Plot Demand Graphing: -Plot Supply D S S

44. Quantity $6 $5 $4 $3 $2 $1 1234 5 6 0 Demand Current Equilibrium Price P Q decrease increase P1P1 P2P2 P3P3 Q2Q2 Q1Q1 Q3Q3 Supply Caused by a change in a Determinant of Supply Shifting the Supply Curve

45. Quantity $6 $5 $4 $3 $2 $1 1234 5 6 0 Supply Current Equilibrium Price P1P1 P2P2 P3P3 Q3Q3 Q1Q1 Q2Q2 Caused by a change in a Determinant of Demand Shifting the Demand Curve decrease increase Demand P Q

46. 1 Why the curve shifts 2 3 4 5 Consumer Incomes Price of Other Goods Consumer Tastes Number of Consumers Consumer Expectations

47. 1 Resource Prices Why the curve shifts 2 Changes in Technology 3Prices of other goods Taxes and Subsidies 6 4Number of Producers Producer Expectations 5