Income, Consumer Expectations, Population, Consumer Tastes and Advertising are all __________________.

factors that can cause a demand for a good to change (other than price)

What is consumer expectations?

if consumers expect the price to rise or fall (think of change of seasonal products or demand for products)

What are examples consumer tastes and advertising?

fashion trends, seasonal clothing, advertising

Normal goods are _____

everyday/ normal products we purchase

If our income increases we demand more normal goods. Such as: __________.

new cars, filet mignon, brand name clothes, homes...etc..

Inferior goods are ________

not as expensive or brand name products

If our income decreases we demand more inferior goods. Such as:

used cars, generic brands, Ramen noodles

Inelastic demands is ________

when demand for a good remains the same, even if prices increase

Elastic demand describes a demand _____

that is VERY sensitive to price changes

Elasticity is measured

percent change in quantity demanded divided by percent change in price (PQD/PCP)

If price changes do consumers automatically change their shopping habits?

No, usually it takes time to change.

Do consumers always quickly react to price increases?

No, because it often takes time to find substitutes

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Econ:Chp 4 Notes GSE

Honors Economics Chapter 4 Notes GSE

Question	Answer
On a demand curve, the vertical axis always displays the _________	price
On a demand curve, the horizontal axis always illustrates the __________	quantity
The demand curve will only illustrate how people will change their buying habits when the price of a good ______ or _______	rises, falls
The demand curve will not take into account other factors other than __________	price changes
What type of demand schedules do we have?	individual and market demand
Income, Consumer Expectations, Population, Consumer Tastes and Advertising are all __________________.	factors that can cause a demand for a good to change (other than price)
What is consumer expectations?	if consumers expect the price to rise or fall (think of change of seasonal products or demand for products)
What are examples consumer tastes and advertising?	fashion trends, seasonal clothing, advertising
Normal goods are _____	everyday/ normal products we purchase
If our income increases we demand more normal goods. Such as: __________.	new cars, filet mignon, brand name clothes, homes...etc..
Inferior goods are ________	not as expensive or brand name products
If our income decreases we demand more inferior goods. Such as:	used cars, generic brands, Ramen noodles
Inelastic demands is ________	when demand for a good remains the same, even if prices increase
Elastic demand describes a demand _____	that is VERY sensitive to price changes
What type of definition does elasticity have?	mathematical
Elasticity greater than 1 is _________.	inelastic
Elasticity less than 1 is___________.	elastic
Elasticity exactly equal to 1 is __________.	unitary elastic
The percentage change in quantity demanded is exactly equal to	the percentage change in price
Elasticity is measured	percent change in quantity demanded divided by percent change in price (PQD/PCP)
Can inelastic demand be short term?	yes
If price changes do consumers automatically change their shopping habits?	No, usually it takes time to change.
Do consumers always quickly react to price increases?	No, because it often takes time to find substitutes

Created by: khenson7

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