Non-price determinants of demand and supply
It is very important in the study of economics to know the difference between ?demand? and ?quantity demanded? and between ?supply? and ? quantity supplied.?
A change in price will result in a change in quantity demanded or quantity supplied and thus cause movement up or down either curve.
There are other non-price determinants of demand and supply (see text, Ch. 3) that can cause the curves to shift either right or left, indicating a change in demand or supply at every price. A shift to the right – also referred to as an outward shift – denotes an increase in demand (supply), while a shift to the left – aka an inward shift – denotes a decrease.
Your Task: Choose one non-price determinant of demand and supply each (chapter 3 refers to these as “other determinants”) and discuss how it applies to a current market topic. Example: A slowdown in the Chinese economy has caused an inward shift of the demand curve and driven down the demand for oil. This is an inward shift in the world demand curve for oil, also referred to as a decrease in demand