ECON 2000 1st Edition Lecture 6Outline of Last Lecture XIX. Values associated with economic systemsa. Pure Command Socialismb. Pure CapitalismXX. Adam Smith (1776) The Wealth of Nationsa. Invisible Hand TheoremXXI. Parts of a marketb. Buying side (Demand side)c. Selling Side (Supply)Outline of Current Lecture XXII. Demanda. Demandb. Quantity Demandc. Demand Scheduled. Law of DemandXXIII. Changes in Demand (figure 1)e. Change in Demandf. Change in Quantity DemandXXIV. Determinants (MEMORIZE)g. Demandh. Quantity DemandXXV. Change of price in related goodsi. Substitute goodj. Complementary goodThese notes represent a detailed interpretation of the professor’s lecture. GradeBuddy is best used as a supplement to your own notes, not as a substitute.Current LectureXXII. Demanda. Demandi. The Amount of a good or service that consumers are both willing and able to buy at every and any possible priceb. Quantity Demandi. The Amount of a good or service that consumers are both willing and able to buy at a specific price c. Demand Schedulei. Table stating demand at every possible price Here is a demand schedule for pizza. The whole schedule represents the demand Individual rows indicate the Quantity Demand The QD of pizza at $6 is 13!Price Quantity$2 32$4 23$6 13$8 4$10 00 5 10 15 20 25 30 350123456789PizzaQuantityPriced. Law of Demandi. Other things remaining the same, if the price of a good rises, the quantity demand of that good decreases. If the price of a good falls, the quantity demand of that good increases.ii. P ↑, Qd↓ and vice versaXXIII. Changes in Demand (figure 1)a. Change in Demandi. Entire curve shifts1. Left for a decrease2. Right for an Increase b. Change in Quantity Demandi. Movement along the existing curve1. Up and left for a decrease2. Down and right for an IncreaseFigure 1ii.Figure 2Figure 3XXIV.Determinants(MEMORIZE)a. Demandi. Change in consumer’s income1. Normal good/servicea. A good in which demand increases for when income increases2. Inferior good/service a. A good in which the demand increases only when income decreasesb. The one used only when income is lowered. I.e. bargain brand tomato soup is the inferior good. Campbell’s is the normal.ii. Change in consumers tastes/preferencesiii. Change of price in related good/services1. Substitute goods (discussed more below)2. Complementary goodiv. Change in consumer’s future expectationsv. Change in number of consumersvi. Change in exchange ratesb. Quantity Demandi. Change in priceXXV. Change of price in related goodsa. Substitute goodi. A good that can be consumed in place of another goodii. If the price of a substitute goes up, the demand of the main product goes up. I f the price of a substitute goes down, the demand for the main product goes downiii. Take subs for example. A substitute for subs are pizzas. If pizza prices increase, and sub prices stay the same, your demand for subs increase.b. Complementary goodi. A good that is consumed with another goodii. If the price of a complementary good goes up, demand for thatproduct goes downiii. Take cereal for example. A complementary good for cereal is milk, since you eat them together. If prices of milk go up, your demand for cereal will