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Demand
| Question | Answer |
|---|---|
| State the law of demand | Increase in price leads to a decrease in quantity demanded |
| Define demand | The number of goods a consumer will buy at various prices |
| Define consumer surplus | The benefit to consumers due to the difference between what they are willing to pay and what they do pay |
| What is individual demand? | The quantity of a good a consumer is prepared to buy at each price |
| Define market demand | The quantity of a good all consumers in the market are prepared to buy at each price |
| What is a demand schedule? | A table that shows the different quantities of a good that consumers are prepared to buy at each price |
| What is a demand curve? | A graph illustrating the demand for a good at various prices at any given time |
| Define effective demand | Demand if consumers are both willing and capable |
| Define composite demand | Demand when a commodity is required for a number of different uses |
| Define joint demand | When the demand for one demand is joint to another |
| Define derived demand | When a good is demanded for its contribution to a manufacture process |
| What causes a shift in the demand curve? | Caused by any non price determinate of demand |
| What causes movement along the demand curve? | Caused by a change in price |
| What is a complementary good? | A good that is used jointly with another |
| What is a substitute good? | Goods that satisfy the same needs and may be considered to be alternatives |
| What is a normal good? | A good that obeys the law of demand which has a positive income effect |
| What is an inferior good? | A good with a negative income effect |
| What are giften goods? | Goods with a positive price effect |
| Name four exceptions to the law of demand | Giften goods. Status symbols. Speculative goods. Addictive goods. |
| What is the substitution effect? | When a good that falls in price becomes cheaper relative to other goods |
| What is the income effect? | An increase in the real income of a consumer due to a reduction in the price of a good |
| Can a normal good be a giften good? | No |
| Name 7 factors that affect demand for a good? | Its own price. The price of other goods. Level of income. Consumer expectations. Consumer tastes. Unplanned factors. Government regulations. |
| What is the income effect? | The change in consumption resulting from a change in real income |
Created by:
JackEatonK98
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