1. Inferior and Giffen Goods

2. Demand in Product/Output Markets Other Determinants of Household Demand Income And Wealth normal goods Goods for which demand goes up when income is higher and for which demand goes down when income is lower. inferior goods Goods for which demand tends to fall when income rises.

3.  Demand in Product/Output Markets Other Determinants of Household Demand Prices of Other Goods and Services substitutes Goods that can serve as replacements for one another; when the price of one increases, demand for the other increases. perfect substitutes Identical products. complements, complementary goods Goods that are bought together; a decrease in the price of one results in an increase in demand for the other and vice versa.

4. Demand in Product/Output Markets Shift of Demand versus Movement Along a Demand Curve Shifts versus Movement Along a Demand Curve When income increases, the demand for inferior goods (hamburgers) shifts to the left and the demand for normal goods (steak) shifts to the right. (£) (£)

5. Demand in Product/Output Markets Shift of Demand versus Movement Along a Demand Curve Shifts versus Movement Along a Demand Curve (continued) If the price of hamburger rises, the quantity of hamburger demanded declines – this is a movement along the demand curve. The same price rise for hamburger would shift the demand for chicken (a substitute for hamburgers) to the right and the demand for ketchup (a complement to hamburgers) to the left. (£) ££