2.1

Changes in Demand

AP Microeconomics

Review: movement vs. shift

The demand shifters (TRIBE)

T — Tastes and preferences

R — Related goods

I — Income

B — Buyers (number of consumers)

E — Expectations of future prices

Graphing demand shifts

1234567891011121314123456789101112QuantityPrice ($)D₁ (Original)D₂ (Income ↑, normal good)

Income increase for a normal good shifts demand right

1234567891011121314123456789101112Quantity of Instant NoodlesPrice ($)D₁ (Original)D₂ (Income ↑, inferior good)

Income increase for an inferior good shifts demand left

Effect of demand shifts on equilibrium

1234567891011121314123456789101112QuantityPrice ($)Old EqNew EqSupplyD₁D₂

Demand increase: both equilibrium price and quantity rise

Multiple shifters at once

AP exam tips for 2.1

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Common mistakes

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Vocabulary

Unit 2 topics

Unit 2 overview2.1Changes in Demand2.10Tax Incidence and Deadweight Loss2.11Price Controls: Ceilings and Floors2.12International Trade and Public Policy2.2Changes in Supply2.3Price Elasticity of Demand2.4Price Elasticity of Supply2.5Cross-Price Elasticity of Demand2.6Income Elasticity of Demand2.7Consumer Surplus2.8Producer Surplus2.9Market Equilibrium and Efficiency
← Previous2.10 Tax Incidence and Deadweight LossNext →2.11 Price Controls: Ceilings and Floors
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