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Shifts in the Demand Curve Chapter 4 Section 2. Ceteris Paribus All things held constant – Demand schedules only take the price into account News reports.

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Presentation on theme: "Shifts in the Demand Curve Chapter 4 Section 2. Ceteris Paribus All things held constant – Demand schedules only take the price into account News reports."— Presentation transcript:

1 Shifts in the Demand Curve Chapter 4 Section 2

2 Ceteris Paribus All things held constant – Demand schedules only take the price into account News reports Weather feelings

3

4 When we drop ceteris paribus – The changes no longer move along the curve – The changes no shift the entire curve

5 What causes a shift? Income – Most items we purchase are normal goods Goods that we demand more of when your income increases – Inferior Goods Good that consumers demand less of when their income increase – Mac and cheese, used cars, generic cereals

6 What causes a shift? Consumer Expectations – Your told that a good is going to go up in price the next day or week

7 Consumer Expectations – You know a product is going on sale next week

8 Your current demand for a good is positively related to its expected future price

9 Population – A rise in population will increase the need for housing, food, and other services – Baby boomers home from war Marriage Services Clothing Educational Products

10 Consumer tastes and advertising – Companies spend money on advertising because they hope that it will increase the demand for the goods they sell Movies, games and internet

11 Related goods – Complements – goods that are bought and used together Golf clubs – golf balls, shoes, tees and bag – Substitutes – goods used in place of one another Skis – snowboard, saucer, sled, and toboggan


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