Economics 22805 www.msu.edumilewsk6

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Economics 2/28/05 www.msu.edu/milewsk6

• OBJECTIVE Examine the factors affecting demand.
• I. Journal 15 pt. A
• -ReadBusiness size, entrepreneurship, medical
  costs top readers minds 3E
• -Read Report Federated to buy May 5E
• 1.) What cost severely hampers American
  entrepreneurs from competing with the nations of
  the Pacific Rim?
• 2.) What popular local department stores are
  part of the Federated-May merger?
• II. Journal 15 pt. B
• -notes on the types of demand
• III. Homework due Friday 3/4/05
• 1.) Read Chapter4 section2 p.95-99
• -Answer questions (1,3-5) p.99
• 2.) Read Chapter 4 section 3 p.101-107
• -Answer questions (3-6) p.107

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Administrative Stuff

• Homework Due Friday 3/4/05
• 1.) Read Chapter4 section2 p.95-99
• -Answer questions (1,3-5) p.99
• 2.) Read Chapter 4 section 3 p.101-107
• -Answer questions (3-6) p.107
• Journals (1-15) Due Thursday 3/3/05
• Tomorrow Wednesday
• -Modern Marvels NYSE
• -Guided Readings on Chapter 4 Demand
• -ALL WORK WILL BE DUE AT THE END OF THE HOUR

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Demand Changes

• Change in quantity demanded movement along the
  demand curve
• Change in demand shift in the demand curve

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Change in quantity demanded

• Income effect the change in quantity demanded
  because of a change in price alters consumers
  real income.
• Substitution effect the change in quantity
  demanded because of a change in the relative
  price of a product

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Example of the income effect

• If the price of a movie drops from 9 to 3, you
  might see more films because you have to work 2/3
  less than you did before to see one movie.
• When the price of goods and services drop and
  your income stays the same, you can buy more. It
  has a similar effect of a pay raise if prices
  remain the same.

6
Example of the substitution effect

• If Wendys raised the price of their .99 extra
  value menu to 1.99 you may choose to substitute
  Wendys food with McDonalds .99 value menu.

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Change in Demand

• Consumer income as income goes up, the amount
  of goods and services you can buy also goes up
• Consumer tastes advertising, news reports, and
  style changes cause consumers to demand more or
  less of a product
• Substitutes products that can be used in place
  of other products i.e. butter/margarine

8

• Complements goods that increase our use of
  other goods
• Change in expectations the willingness to buy
  more or less of a product based on future
  predictions
• Number of consumers as more consumers enter the
  market demand curve will shift to the right
  vice versa.

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Economics 3/1/05 www.msu.edu/milewsk6

• NO SCHOOL SNOW DAY!!!

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Economics 3/2/05 www.msu.edu/milewsk6

• OBJECTIVE Examine the history of the New York
  Stock Exchange.
• I. Modern Marvels The NYSE
• -watch Modern Marvels The NYSE
• -Answer questions while viewing the film due at
  the end of the hour
• II. Homework due Friday 3/4/05
• 1.) Read Chapter4 section2 p.95-99
• -Answer questions (1,3-5) p.99
• 2.) Read Chapter 4 section 3 p.101-107
• -Answer questions (3-6) p.107
• Journals (1-15) Due Tomorrow!

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Economics 3/3/05 www.msu.edu/milewsk6

• OBJECTIVE Finish examination of the factors
  affecting demand.
• I. Journal 16 pt. A
• -Read Business Week Newsclip p.100
• -Answer questions (1-3) p.100
• II. Journal 16 pt. B
• -finish notes on the change in demand (graphs in
  class on overhead)
• III. Homework due tomorrow
• 1.) Read Chapter4 section2 p.95-99
• -Answer questions (1,3-5) p.99
• 2.) Read Chapter 4 section 3 p.101-107
• -Answer questions (3-6) p.107
• Journals (1-15) Due Today!

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Economics 3/4/05 www.msu.edu/milewsk6

• OBJECTIVE Finish examination of the factors
  affecting demand.
• I. Chapter 4 Guided Readings
• -worksheets on demand