Shifts in the Demand Curve pg. 13-14

The market demand curve depicts what relationship?

The relationship between quantity demanded and its price

What does the market demand curve assume?

All other factors that might influence demand remain unchanged

What is quantity demanded?

A point on the curve

What is demand?

The entire curve

What is the only factor that can change quantity demanded?

Price

If one factor changes what can shift?

The entire demand curve

In the market for gasoline if bicycle lanes are implemented what will happen to the quantity of gasoline demanded?

Quantity of gasoline demanded will decline at every price

The negative decrease in the quantity demanded of gasoline is known as what?

Decrease in demand

Decreases in demand causes the market demand curve to shift in what direction?

Left

The demand curve shifting left indicates what?

At each price a lower quantity is demanded

What factors affect demand?

Income, price of related goods, tastes, expectations, and number of buyers

What is the relationship between demand and income for most goods?

Positive

When income rises what happens to the demand of goods?

The demand of goods rises

What are normal goods?

Goods for which as income rises the demand for goods rises and as income falls demand for goods falls

Goods for which demand falls as income rises are called what?

Inferior goods

What might be an example of an inferior good?

Bus rides. As income increases consumers will be more likely to buy a car and drive instead of taking the bus

If the price of an airline ticket falls what does the law of demand say consumers will do?

Purchase more airline travel

How does a decrease in the price of airline tickets affect quantity of gasoline demanded?

Airline travel is to some extent a substitute for travel by car, people will likely reduce the number of miles they drive and hence the quantity of gasoline demanded

When a decline in the price of one good causes a reduction in the demand for another these goods are what?

Substitutes

When a lower price of a good causes demand to increase on another we call these good?

Compliments

How much is spent each year on advertising?

Billions

Billions a year are spent on advertising for what purpose?

To alter our tastes, trends and attitudes about goods and services

If the perceived benefits of consumption change, what will change with it?

Demand

What might changes that you expect to occur in the future affect

Demand

Market demand is derived through what?

Adding up the demands of individual consumers

How will more consumers affect demand?

More consumers will cause an increase in demand