Help
Options
Didn't know it?
click below
click below
Knew it?
click below
click below
Don't Know
Remaining cards (0)
Know
retry
shuffle
restart
0:00
Embed Code - If you would like this activity on your web page, copy the script below and paste it into your web page.
Normal Size Small Size show me how
Normal Size Small Size show me how
Demand
| Term | Definition |
|---|---|
| DEMAND | is the number of units of goods a consumer will buy at different prices |
| LAW OF DEMAND | states that an increase in price leads to a decrease in quantity demanded and a decrease in price leads to an increase in quantity demanded. |
| CONSUMER SURPLUS | the benefit to consumers due to the difference between what consumers actually pay to consume a good and what they would have been willing to pay rather than go without the good |
| INDIVIDUAL DEMAND | studies the quantities of a good that an individual consumer demands at different prices. |
| MARKET/AGGREGATE DEMAND | shows the different quantities of a good that all consumers in the market are prepared to pay at each price. It is derived by adding together all the individual quantities demanded for a good |
| DEMAND SCHEDULE | is a table that shows the different quantities demanded for a good at different market prices at any given time. |
| INDIVIDUAL DEMAND SCHEDULE | lists the different quantities of a good that an individual consumer is prepared to buy at each price |
| MARKET DEMAND SCHEDULE | lists the different quantities of a good that all consumers in the market are prepared to buy at each price. It is derived by adding together all the individual demand schedules for a good |
| DEMAND CURVE | is a graph illustrating the demand for a good at various prices at any given time |
| EFFECTIVE DEMAND | is demand backed by the necessary purchasing power (i.e. money).Consumers must be willing to buy and be capable of paying the price set by the supplier. It |
| DERIVED DEMAND | occurs when one commodity is an essential part of another commodity and is demanded not for its own sake but because it is required to manufacture another good e.g. timber and furniture |
| COMPOSITE DEMAND | occurs when a commodity is required for a number of uses e.g. sugar |
| JOINT DEMAND | occurs when the demand for one commodity is joined with the demand for another e.g. cars and petrol |
| SHIFT IN THE DEMAND CURVE | is caused if any of the factors other than the price of the good itself change. |
| MOVEMENT ALONG THE DEMAND CURVE | is caused by a change in the price of the good itself, ceteris paribus. |
| COMPLEMENTARY GOODS | are goods that are used jointly (i.e. joint demand).These goods are used in conjunction with one another.A rise in the price of one good will lead to a decrease in the demand for another good. |
| SUBSTITUTE GOODS | are goods that satisfy the same needs and thus can be considered as alternatives to each other e.g. different brands of tea |
| NORMAL GOOD | is a good that obeys the law of demand and has a positive income effect i.e. more of these goods will be bought when the consumer's real income is increased. |
| INFERIOR GOOD | is a good with a negative income effect i.e. less of these goods will be bought when the consumer's real income is increased. |
| GIFFEN GOOD | is a good with a positive price effect i.e. more is bought as the price rises and less is bought as the price falls |
| THE PRICE EFFECT | is the overall effect, and occurs when the substitution effect and income effect are added together. |
| SUBSTITUTION EFFECT | When the price of a good rises customers may shift to cheaper substitutes to maximise utility |
| INCOME EFFECT | When the price of a good falls it means that the consumer’s real income will rise. |
| EXCEPTIONS TO THE LAW OF DEMAND | Giffen goods, status symbols, speculative goods, goods of addiction. |
Created by:
deborahh
Popular Economics sets