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Unit 2 Lesson 2 Presentation PDF
Unit 2 Lesson 2 Presentation PDF
Unit 2 - Lesson 2
Learning Outcomes
1. Explain how demand may be affected by factors such as:
● Changes in Income (Normal/Inferior Goods)
● Preferences
● Substitute Goods
● Complements
● Demographic changes
Normal Good: as Income increases the demand Inferior Goods: as Income increases the demand
for these goods increases (shift right). There is a for these goods decreases (shift left). There is an
direct relationship between Income and Demand. indirect relationship between Income and Demand.
Generally they are cheaper alternatives to higher
quality goods.
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Substitute Goods
Substitute Good: Goods that an individual might easily use in place of
another.
There is an indirect relationship between Price and Demand for substitute
goods.
Coke & Pepsi are considered substitutes.
Indirect
Relationship
Direct
Relationship
More determinants….
Taste & Preferences: Goods become more or less popular and this will cause
shifts in the Demand curve.
A good becomes more fashionable, the demand will increase (right shift).