Lesson 3.2 Shifts in Demand Key Terms ceteris paribus- the commonly used Latin phrase meaning 'all other things remaining constant. normal good- any goods for which demand increases. inferior good- a good that decreases in demand when consumer income rises. demographics- the application of economic analysis to demography. complement- a good with a negative cross elasticity of demand. substitute- two goods that could be used for the same purpose. nonprice determinant- a force outside of supply that affects the demand for a product. Academic Vocabulary Assumption: a belief or idea taken to be true Expectation: a belief that an event or development will occur in the future Generic: not having a brand name Lesson Objectives 1. 2. 3. Explain the difference between a change in quantity demanded and a shift in the demand curve. Identify non-price determinants that create changes in demand and can cause a shift in the demand curve. Summarize examples of how a change in demand for one good can affect demand for a related good. Changes in Demand: Text 1. Vocabulary: Determine the Meaning: What does ceteris paribus mean? Restate the meaning in your own words. It is a Latin word that means all thing remain constant. 2. Cite Evidence: Read the first paragraph under “Changes in Demand.” Was the person’s change in demand for a burger in this situation based on price or on some other factor? It was based on some other factor such as rain. The Non-Price Determinants of Demand: Text 3. Summarize: As you read through this lesson, complete this web diagram about what causes demand curves to shift. 4. Categorize: What are non-price determinants, and why are they given that name? Give some examples. Non-price determinants are several factors that can cause demand for a good to change. Some examples include advertising, income, and demographics. 5. Identify Cause and Effect: After reading the section “Changes in Income,” explain how changes in income affect the demand for normal goods. A consumer's income affects his or her demand for most goods. Most items that we purchase are normal goods, goods that consumers demand more of when their incomes increase. 6. Use Visual Information: Review the map “States with Tax Holidays.” Note which states offer tax holidays. How do you think tax holidays affect demand? Tax holidays affect demand because if you expect a tax holiday next week, you are going to wait to buy that item next week or if next week you know the price is going to be higher, you will buy sooner than later. 7. Draw Inferences: Think about normal goods and inferior goods. Give an example of normal and inferior goods that are also substitutes. An example of normal goods would be purchasing an iPhone 11 and an iPad after you got your bonus check instead of buying a galaxy and a tablet. An example of inferior goods would be not buying plastic plates no more but instead buying glass plates.