From Individuals to Market Demand (November 7th, 2011)

Horizontal submation of total quantity demand. They will be more "elastic" when they are bought together. Change from macro demand to aggro-demand when asking the public.

Comparative Statics
Quality demand and what things impact how much we buy?

• Prices of the good in question
• "Other Stuff"

Anytime it depends on the changes, it will be the changes in demand, not changing in the quantity demand.
Changes the way people think about prices:
[Ability]

1. Income
2. Prices of Other Things

[Willingness]

1. Expectations
2. Taste Might Change
3. Number of Participants

Demands can shift in and out depends on if the demand increases or decreased and whether or not he is willing to get more of the burritos for a certain amount.

Normal Goods
When income increases, quality demand increases.
"Inferior" then quantity demand will fall. Prefrences are subjective. More of the things you like.
Substitutions (Replacement):
When the price of substitution good increases, price of burritos increases.
There is no natural paring of goods. We only substitute when viewed on the relationship of the two.
Complements (Go together):
Prices of hot sauce goes up, the decrease in consumption of burritos because f the relationship. Goods are tied together.

• Tastes and how you view things will impact the demand curves.
• If a storm occurs, the expectations is that since everyone will be getting wood and such, you may respond today to buy it.
• Expectations of the prices of substitutes may have also changed.

Elasticity: How much more!

• Demand for pencils are inelastic.
• Demand for euro vacations are elastic.
• We can measure elasticity with anything. We can also discuss elasticity through that.

Own Price Elasticity of Demand:
(% Change in Quantity Demand)/ % (Change in Price of Burritos)