Section+4.2

Ceteris Paribus: A latin phrase that mean "all other things held constant Demand Schedule only takes price into consideration An increase in price: decrease in the quantity demanded A decrease in price: Increase in the quantity demanded Change in entire curve: change in demand Shift to the right of the curve: Increase in demand Shift to the left of the curve: Decrease in demand What causes a shift -income -consumer expectations -population -consumer tastes and andvertising Normal Goods: goods that consumers demand more of when their income increases Inferior Goods: goods that consumers demand less of when their incomes increases Demand curve for one good can be effected by a demand curve of another 2 types of goods that interact this way -Complements: Two goods that are bought and used together -Substitutes: goods used in place of one another

1.)What is an example of something you consider an inferior good? Albertsons Rice Crispies instead of brand name Rice Crispies 2.)What is one good that can be considered a complement for another? Oreo cookies and milk 3.)What are two goods that can be considered substitutes? Computer and laptop 4.)How does the ceteris paribus assumption affect a demand curve? SInce Ceteris Paribus is things being held constant it keeps the demand curve from shifting 5.)According to the law if demand and the chart median house prices on page 540, how do you think demand for houses changed between 1998 and 2004? Since the price of houses went up the demand for houses went down 6.)What is the difference between a shift along a demand curve and a shift of a demand curve? The difference is that a shift along a demand curve only takes price into account and a shift of a demand curve takes income, Consumer expectations, population, and consumer tastes and advertising.