• Learning Objective:– Today I will be able to identify what changes demand

by writing a summary about how I have contributed to demand.

• Agenda:1.Finish Worksheet (Elasticity of Demand)2.Learning Objective3.Lecture: Ch. 4.3 Changes in Demand4.Vocabulary5.Quiz—Review Quiz6.Exit Slip

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• Title Notes: Ch. 4.3 Changes in Demand• Determinants of Demand Curve (Shifts the Curve):

1. Consumer income2. The prices of related goods3. Number & Composition of consumer goods4. Consumer Expectations5. Consumer Tastes

CONTEMPORARY ECONOMICS: LESSON 4.3

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• Increase of demand= rightward shift – Consumers more willing & able

• 1. Changes in consumer income– Normal goods: Consumption as income– Inferior goods: consumption as income

• Less quality goods– Ex. Frozen food, used car, used clothes, etc.

• 2. The prices of related goods– Substitutes

• Or of prices of substitutes shifts curve.– Ex. Costco Pizza—Caeser’s Pizza– Ex. Pizza--Tacos

– Complements• or of price of complements shifts curve

with it. • Ex. Pizza & Soda—Chips & Salsa

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Check for Understanding

1. Consumption of Normal Goods increases when……..

2. What are inferior goods?3. Inferior goods are purchased when…….4. What is a substitute for Wing Stop?– Perfect or imperfect substitute?

5. What are two products that complement each other?

CONTEMPORARY ECONOMICS: LESSON 4.3

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• 3. Changes in the size or composition of the population– Size= population • If pop. grows the # of consumers will increase.

– Composition= age group (specific group)• Ex. Baby boomers demanded more baby car seats & baby

food---- and more schools.

CONTEMPORARY ECONOMICS: LESSON 4.3

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• 4. Changes in consumer expectations– Future Income

• Ex. Work bonus, you spend more now because you expect more money later.

– Future price• Ex. If Price for houses is expected to increase,

then consumers will buy now (will shift the demand curve)

• 5. Changes in consumer tastes– Likes & Interests:

• food, music, clothing, reading, movies, TV shows – indeed, all consumer choices – are influenced by consumer tastes.

• After economists have ruled other determinants, they attribute shift of curve to consumer tastes. 6

Check for Understanding

1. If composition OR population shows what will happen to the demand curve????

2. What are TWO expectations consumers have that shift the demand curve????

3. What are consumers tastes?

CONTEMPORARY ECONOMICS: LESSON 4.3

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Movement Along a Demand Curve VS. Shift of the Demand Curve

CONTEMPORARY ECONOMICS: LESSON 4.3

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• Causes of Movement along D curve: A change in price, other things constant Changingquantity

demanded.

• Causes of Shift of D Curve: A change in one of the

determinants, other than price

Changingdemand.

What are 5 determinants of demand, and how do changes in each shift the demand curve?

The 5 determinants are Consumer income – a rise in income causes an outward (increase)

shift of the DCThe price of related goods – a rise in this causes an outward

(increase) shift of the DC Number of consumers in the market – a rise in this causes an

outward (increase) shift of the DCConsumer expectations - a rise in this causes an inward (decrease)

shift of the DCConsumer tastes - a rise in this causes an inward (decrease) shift

of the DCCONTEMPORARY ECONOMICS:

LESSON 3.39

Checking for Understanding

Check for Understanding

1. Curve moves along the demand curve when…….– Changing…….

2. Curve shifts the demand curve when…..– Changing……

CONTEMPORARY ECONOMICS: LESSON 4.3

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Extensions of Demand Analysis• Role of time in demand– The cost of consumption has two

components: • the money price of the good and

(price of good)• the time price of the good (value of a

good that works faster & more convenient)

• The cost of waiting in line– The opportunity cost is not doing

something else.

CONTEMPORARY ECONOMICS: LESSON 4.3

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What’s the difference between the money price of the good and its time price?

1. Money price is how much a good costs.2. Time price is the monetary value you place on

having a good that works faster or is more convenient.

CONTEMPORARY ECONOMICS: LESSON 3.3

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Checkpoint: pg.123

Vocabulary

• Work on vocabulary INDEPENDENTLY!– NO TALKING– Headphones allowed

• Ch. 4 Vocabulary• Ch. 5 Vocabulary

CONTEMPORARY ECONOMICS: LESSON 4.3

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Quiz

CONTEMPORARY ECONOMICS: LESSON 4.3

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Exit Slip

• In what ways do you think you have contributed to the shift of the Demand Curve?

CONTEMPORARY ECONOMICS: LESSON 4.3

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