ECON 2010 Lecture Notes - Lecture 7: Giffen Good, Rolex, Demand Curve

• School: CU-Boulder
• Department: Economics
• Course: ECON 2010
• Professor: Zacharyszlendak

Document Summary

The steeper the demand curve the less price sensitive a good is. The flatter the curve the more price sensitive a good becomes. Demand curves are bowed outwards for most goods. Demand curves are bowed inwards for goods such as water, and epipens. These goods are examples of essential goods that people need but not a ton of. Complimentary goods are two common goods that are typically bought together (ipod and headphones) Substitute goods are goods that consumers choose instead of another (camry and corolla) Normal goods are bought when income increases (gas, houses) Inferior goods are bought when income is low (ramen noodles) Luxury goods are extremely expensive normal goods that are only purchased with excessive amounts of money (bentley rolex diamonds) A giffe(cid:374) good o(cid:272)(cid:272)urs (cid:449)he(cid:374) the pri(cid:272)e goes up a(cid:374)d (cid:272)o(cid:374)su(cid:373)ers (cid:271)u(cid:455) (cid:373)ore (cid:894)do(cid:374)"t reall(cid:455) e(cid:454)ist(cid:895) Price shifts the demand curve if the price of a compliment or substitute changes.