day 5 part 3 Microeconomics: Shifts in the Demand Curve

Practice flashcards covering the concepts of demand curve shifts, determinants of demand, and the difference between movements and shifts based on the introductory lecture notes.

Demand curve

A representation of the relationship between price and quantity demanded for all buyers in a market or for an individual buyer.

Rightward shift

An increase in demand where, at each price, the quantity demanded is higher than it was previously.

Leftward shift

A decrease in demand where, at each price, the quantity demanded is lower than it was previously.

Tastes and preferences

A determinant of demand where a sudden liking or disliking for a product causes the demand curve to shift.

Inferior good

A good for which demand decreases when income or wealth increases, such as instant ramen noodles or Greyhound bus rides.

Normal good

A good for which demand increases when income or wealth increases, such as airplane tickets.

Complements

Goods that are consumed together, such as socks and shoes or coffee and creamer; a price decrease in one leads to an increase in demand for the other.

Substitutes

Goods that are typically not consumed together and can replace one another, such as tea and coffee; an increase in the price of one leads to an increase in demand for the other.

Number and scale of buyers

A factor that shifts the demand curve based on an influx or exodus of consumers, such as students returning to a town.

Buyers' expectations

Predictions about the future, such as an expected shortage or pandemic, that cause consumers to change their current quantity demanded at each price.

Own price

The price of the good itself, which causes a movement along the demand curve rather than a shift.

Movement along the demand curve

A change in quantity demanded occurring exclusively because the price of the product changed, while factors like income and tastes were held constant.

Shift in the demand curve

A change in the entire relationship between prices and quantity demanded caused by a change in determinants other than the product's own price.