Demand Drivers: Income, Population, and Preferences

Economics Grades High School 3:33 Video
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Lesson Description

Explore how changes in income, population size, and consumer preferences shift the demand curve, impacting market dynamics. Understand normal and inferior goods.

Video Resource

Changes in income, population, or preferences | Microeconomics | Khan Academy

Khan Academy

Duration: 3:33
Watch on YouTube

Key Concepts

  • Demand Curve Shifts
  • Normal Goods
  • Inferior Goods
  • Consumer Preferences
  • Population Impact

Learning Objectives

  • Explain how changes in income, population, and preferences cause shifts in the demand curve.
  • Differentiate between normal and inferior goods.
  • Analyze how shifts in the demand curve affect market equilibrium.

Educator Instructions

  • Introduction (5 mins)
    Begin by reviewing the basic concept of the demand curve and the factors held constant when moving *along* the curve (price). Introduce the idea that changes in other factors *shift* the entire curve.
  • Video Viewing (10 mins)
    Play the Khan Academy video 'Changes in income, population, or preferences | Microeconomics'. Instruct students to take notes on the key factors that shift the demand curve.
  • Discussion: Income and Demand (10 mins)
    Discuss how changes in income affect demand. Introduce the concepts of 'normal goods' and 'inferior goods'. Ask students for real-world examples of each.
  • Discussion: Population and Preferences (10 mins)
    Discuss how population changes and shifts in consumer preferences impact demand. Use examples like trending products or celebrity endorsements.
  • Activity: Demand Curve Scenarios (10 mins)
    Present students with various scenarios involving changes in income, population, or preferences. Have them draw the resulting shift in the demand curve on a whiteboard or using online graphing tools.
  • Wrap-up and Assessment (5 mins)
    Review the key concepts and learning objectives. Administer the multiple-choice and fill-in-the-blank quizzes.

Interactive Exercises

  • Demand Curve Shifters
    Students are given scenarios (e.g., a popular celebrity endorses a product, a city's population doubles, a major recession hits) and must identify which factor is changing (income, population, or preferences) and predict the resulting shift in the demand curve (left or right).
  • Normal vs. Inferior Goods Sort
    Provide a list of goods, and have students sort them into 'Normal Goods' and 'Inferior Goods' categories, justifying their choices.

Discussion Questions

  • Can you think of examples of goods or services that might be considered 'inferior' goods? Why?
  • How might a company use marketing to influence consumer preferences and shift the demand curve for its product?
  • What are some real-world events that could cause a significant shift in population and, consequently, demand in a specific market?

Skills Developed

  • Critical Thinking
  • Economic Analysis
  • Graphical Representation

Multiple Choice Questions

Question 1:

Which of the following factors is NOT held constant when moving *along* a demand curve?

Correct Answer: Price

Question 2:

An increase in income will generally cause the demand curve for a normal good to:

Correct Answer: Shift to the right

Question 3:

An increase in population will generally cause the demand curve to:

Correct Answer: Shift to the right

Question 4:

A good for which demand *decreases* as income *increases* is called a(n):

Correct Answer: Inferior good

Question 5:

A popular celebrity endorsing a product is most likely to affect:

Correct Answer: Preferences

Question 6:

If the price of a good increases, and as a result, demand for another good decreases, this is an example of

Correct Answer: complementary goods

Question 7:

What happens to the demand curve when people's tastes change?

Correct Answer: It shifts

Question 8:

If the price of a good is expected to increase in the future, how will the demand for it change now?

Correct Answer: Increase

Question 9:

Which of the following is not a determinant of demand?

Correct Answer: Cost of production

Question 10:

A shift in the demand curve represents a change in:

Correct Answer: The entire demand schedule

Fill in the Blank Questions

Question 1:

A shift in the demand curve is caused by a change in factors held _________.

Correct Answer: constant

Question 2:

Goods for which demand increases as income increases are called ________ goods.

Correct Answer: normal

Question 3:

If the population of a town decreases, the demand curve will shift to the _________.

Correct Answer: left

Question 4:

Changes in consumer _________ can cause the demand curve to shift.

Correct Answer: preferences

Question 5:

An inferior good has a ________ relationship between income and demand.

Correct Answer: negative

Question 6:

Demand is affected by changes in _________, population, or preferences.

Correct Answer: income

Question 7:

The demand curve illustrates the relationship between price and _________.

Correct Answer: quantity

Question 8:

The video says that the author having a sordid past will cause demand to _______.

Correct Answer: decrease

Question 9:

Population changes cause the demand curve to _________.

Correct Answer: shift

Question 10:

The demand curve goes down if the income ________.

Correct Answer: decreases

Educational Standards

SOC.9-12.E.3.1:Analyze how price and non-price factors affect the demand and supply of goods and services available in the marketplace. SOC.9-12.E.10.3:Explain how changes in supply and demand cause prices to change and in turn, cause buyers and sellers to change, including changes in price of productive resources and technologies used to make the product, profit opportunities available to producers for selling other products, number of sellers in a market, consumer incomes, consumer options, and the number of consumers in a market.

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