1.25.10, Lecture Notes, Econ 201

1.25.10, Lecture Notes, Econ 201 - 1.25.10, Lecture Notes,...

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1.25.10, Lecture Notes, Econ 201 Demand Overview: When taste changes for the better, the demand curve SHIFTS outward to the right. Income can cause a SHIFT in the Demand Curve. NORMAL AND INFERIOR GOODS DEFINED Normal good: if income goes up you buy more, if your income goes down you buy less. Inferior Good: If your income goes up, you want less of that product, and if your income goes down you want more of that product. (Ex: Ramen Noodles, Margarine, Meijer brand products) Normal Good: when an increase in income causes an increase in demand Inferior Good: When an increase in income causes a decrease in demand Price of Other Goods Substitutes: two goods are substitutes if an increase in the price of one of them causes an increase in the demand for the other. Increase in the price of cola would increase the demand for the lemon-line if the goods were substitutes. Complements: When the price of one product goes down, the demand for the other product goes up. DEMAND SUMMARY
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This note was uploaded on 10/13/2011 for the course EC 201 taught by Professor Haider during the Spring '10 term at Michigan State University.

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1.25.10, Lecture Notes, Econ 201 - 1.25.10, Lecture Notes,...

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