Changes in Demand: T.R.I.P.E. Mnemonic (Economics – UNIT 2) – Flashcards
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tastes and preferences
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T
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related goods (*complements* and *substitutes*)
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R
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income
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I
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population
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P
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expectations of future price changes
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E
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affected by advertising trends, health considerations, etc.
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tastes and preferences
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goods/services used in conjunction (ex. When the price of gas increases, the demand for its component, SUVs, decreases.)
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complements (related goods)
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goods/services used in lieu of other goods/services (ex. When the price of beef increases, the demand for chicken increases.)
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substitutes (related goods)
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When consumer's income increases: - Demand for *normal* goods/services ... ... ex. more demand for steak - Demand for *inferior* goods/services ... ... ex. less demand for Ramen Noodles
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increases/decreases (income of consumers)
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When consumer's income decreases: - Demand for *normal* goods/services ... ... ex. less demand for steak - Demand for *inferior* goods/services... ... ex. more demand for Ramen Noodles
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decreases/increases (income of consumers)
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more people = more demand (and visa versa)
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population
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if consumers expect prices to rise in the future, then demand increases now if consumers expect prices to fall in the future, then demand decreases now
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expectations of future price changes
