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Unformatted text preview: -Both consu m e cds 1. Incom e Normal good : a good for which the quantity de m a nd ed rises when consu m er incom e rises Inferior good: food for which the quantity de m a nd ed falls when incom e increas es Increas e in d e m a nd: for any price, the quantity d e m a nd ed increas es 2. Prices of other goods-Substitutes : two good are substitutes if when the price of one good increases, the dem for the other good also increase.-Complements : two goals are complements if when the price of one good increases th demand for the other decreases. Oil & Automobile 3. Tastes -Allowes to change over time-Always must be consistent and rationale-Rationality : 4. Number of buyers 5. Expectations...
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- Fall '07
- Supply And Demand