1.1 Demand

Question 1

What is ‘quality demanded’?

Answer 1

Quality demanded refers to the amount of a good that buyers are willing and able to purchase.

Question 2

What is ‘willing’?

What is ‘able’?

Answer 2

• Willing refers to a buyer that wants to by at that amount

- Able refers to the buyer having enough income to buy at the desired amount (given the price of the good)

Question 3

What is the ‘Law of Demand’?

Answer 3

The claim that, other things being equal, the quantity demanded of a good falls when the price of the good rises.

Question 4

What are the two ways of representing the relationship between price and quantity demanded?

Answer 4

1. Demand Schedule

2. Demand Curve

Question 5

What is a ‘demand schedule’?

Answer 5

A table that shows the relationship between the price of the good and the quantity demanded.

• included the units and the time period

Question 6

What is a ‘demand curve’?

Answer 6

A graph that shows the relationship between the price of the good and the quantity demanded.

x-axis = quantity
y-axis = price

Question 7

What is ‘market demand’?

Answer 7

Refers to the sum of all individual demands for a particular good or service.

Question 8

What can you graphically add towards market demand?

Answer 8

1. Graphically you add horizontally the individual demands to conclude the market demand

Question 9

What happens when there is a change in price (demand curve)?

Answer 9

A change in price generates a movement along the demand curve.

• This means there is a change in quantity demanded

Question 10

What happens when you change one factor but keep the price the same (demand curve)?

Answer 10

There is a shift in the demand curve (left or right).

• This means there is a change in demand