Chap004 ecn 200 - CHAPTER 4 CONSUMER DEMAND WHAT IS THIS...

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Unformatted text preview: CHAPTER 4 CONSUMER DEMAND WHAT IS THIS CHAPTER ALL ABOUT? The chapter introduces students to the analysis of consumption patterns and the basic explanations of consumer behavior. The emphasis here is on the microeconomic aspects of consumption and how consumption decisions are influenced by tastes, prices, income, expectations and the availability and prices of different goods. The chapter uses the concept of elasticity to explain reactions in consumption decisions to price changes, but it does not go into detail about advanced concepts such as cross-price elasticity or income elasticity. In addition to the basics of demand theory, the chapter offers specific examples of consumer behavior and how they represent real-world proof of theoretical conclusions. The chapter is answers for the following questions: 1. How do we decide how much of a good to buy? 2. How does a change in price affect the quantity we purchase or the amount of money we spend on a good? 3. What factors other than price affect our consumption decisions? NEW TO THIS EDITION New headline on iTunes Music Store New headline on New York City cigarette tax Two new Questions for Discussion Two new Problems Chapter 4 Consumer Demand Page  Living Econ on Am I a Spendthrift? Chapter 4 Consumer Demand Page  LECTURE LAUNCHERS Where should you start? 1. The beginning of this chapter is a partial review of chapter 3, Supply and Demand. This chapter focuses on the demand side of the market. Start your lecture by reemphasizing the determinants of demand. It is always useful to review what you have already covered in an earlier lecture. Ask students to cite examples of determinants from their own lives. The more often that examples relate to the students everyday life, the more likely they will understand the material. 2. A great launching point for the lectures on the demand for goods is to talk about how people spend their money. The Headline Men vs. Women: How They Spend on page 90 is a great place to begin this discussion. In addition, Figure 4.2 is also a great place to begin your discussion on The Demand for Goods. This article helps to illustrate that consumption patterns vary by gender, age, and other characteristics. 3. Ask students what happens to the satisfaction they get from each slice of pizza as they eat more and more pizza in a single night. All students will admit that eventually the additional satisfaction from each slice diminishes. This is a great way to introduce the concept of utility and marginal utility.diminishes....
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This note was uploaded on 01/27/2010 for the course DS csc 270 taught by Professor Dr.m.g during the Spring '10 term at Notre Dame University-Louaize.

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Chap004 ecn 200 - CHAPTER 4 CONSUMER DEMAND WHAT IS THIS...

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