Economics class notes
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February 7 Notes

Bell Ringer

How would the following change demand?

  • Increase in price of good
    • decrease
  • Increase in household income and demand for good
    • increase
  • Demand for good after negative news about a substitute good is spread
    • increase
  • Expected price increase in good
    • increase (but will decrease after the price increases)
  • Reduction in price of substitute good
    • decrease (but increase for the substitute)
  • Increase in price of compliment good
    • decrease

What makes demand more or less elastic?

  • Necessities vs Luxuries
  • Supply
  • Share of income spent on good (it’s worth less to you if you’re rich)
  • Time (waiting = elastic)
  • Who pays