Lecture6 - Announcements HW2 due tonight at midnight. 1 of...

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nnouncements Announcements HW2 due tonight at midnight. 1of 46
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DEMAND IN PRODUCT/OUTPUT MARKETS SHIFT OF DEMAND VERSUS MOVEMENT ALONG A DEMAND CURVE TABLE 3.2 Shift of Anna’s Demand Schedule Due to increase in Income SCHEDULE D 0 SCHEDULE D 1 Price (Per Call) Quantity Demanded (Calls Per Month at an Income of $300 Per Month) Quantity Demanded (Calls Per Month at an Income of $600 Per Month) $ 0 30 35 .50 25 33 3.50 7 18 00 2 7.00 3 12 10.00 1 7 15.00 0 2 20.00 0 0 2of 46 FIGURE 3.3 Shift of a Demand Curve Following a Rise in Income
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DEMAND IN PRODUCT/OUTPUT MARKETS shift of a demand curve The change that takes place in a demand curve corresponding to a new relationship between quantity demanded f a good and price of that good The shift is of a good and price of that good. The shift is brought about by a change in the original conditions (1 4). movement along a demand curve The change in quantity demanded brought about by a change in price. 3of 46
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IMPORTANT! ONLY A CHANGE IN PRICE CAN CAUSE A CHANGE IN QUANTITY DEMANDED ” BY A HOUSEHOLD A change in DEMAND for a household (a shift of the demand curve) can be caused by: change in the household’s income or wealth 1.A change in the household s income or wealth. 2.A change in the price of other available products (substitutes or compliments). 3.A change in the household’s tastes. 4.A change in the household’s expectations about things like future income or prices. 4of 46
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DEMAND IN PRODUCT/OUTPUT MARKETS 5of 46 Shifts versus Movement along a Demand Curve
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DEMAND IN PRODUCT/OUTPUT MARKETS MOVING FROM HOUSEHOLD DEMAND TO MARKET DEMAND kt dd f ll th market demand The sum of all the quantities of a good or service demanded er period by all the households buying in per period by all the households buying in the market for that good or service.
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This note was uploaded on 03/18/2008 for the course ECON 2005 taught by Professor Zirkle during the Spring '07 term at Virginia Tech.

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Lecture6 - Announcements HW2 due tonight at midnight. 1 of...

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