1.2.1 Deamnd

Question 1

Factors leading to a change in demand

Answer 1

• changes in price of substitute and complementary goods
• changes in consumer incomes
• fashions , tastes , preferences
• advertising and brands
• demographics
• external shocks
• seasonality

Question 2

What is demand

Answer 2

Is the mount society is willing and able to buy at a set price at a given point in time

Question 3

A normal good is one where

Answer 3

If prices rise , demand will fall and vice Versa

Question 4

The demand curve goes on what direction

Answer 4

\

Question 5

What labels are on the demand curve graph

Answer 5

On the Y axis is price

On the X axis is quantity

Question 6

It goes from p to …

and Q to

Answer 6

P1 to Q2

Question 7

On the demand curve what will cause movement along the curve

Answer 7

Only price

Question 8

Factors leading to a change in demand

Answer 8

• if a change in demand is caused by a change in price this is shown by a movement along the demand curve
• if the change in demand is caused by a change in any other factor this is caused by a shift in demand

Question 9

What has a major impact on the quality demand of a product

Answer 9

Substitutes and complementary Products

Question 10

Describe substitute products

Answer 10

Acts as an alternate ,therefore creating competition

Eg Pepsi and coke

If the price of good A increases the demand for good B increases

Positive correlation

Question 11

Describe complementary products

Answer 11

Is a product brought alongside a good or service

Eg phone and charger

If the price of good A increases the demand for good B will decrease

Negative correlation

Question 12

Changes in consumer incomes will change the demand for what types of products

Answer 12

Necessities
Luxuries
Inferior goods

Question 13

Explain how the demand for necessity products are changed due to consumer incomes

Answer 13

It is less likely that demand for these will in relation to income

Question 14

Explain how the demand for luxury products are changed due to consumer incomes

Answer 14

If income increases customers may be able to afford more luxury items , increasing demand

Equally if income falls these may be the first items cut

Question 15

Explain how the demand for inferior products are changed due to consumer incomes

Answer 15

If income increases demand may decrease as customers switch to being able to afford better quality products

Eg Heinz instead of value

Question 16

Explain how fashion , tastes And preferences are factors leading to a change in demand

Answer 16

People’s tastes changes over time and demand for fashionable products change regularly

As some products become more fashionable there is an increase in demand . Just as quickly demand can disappear as tastes and fashion changes.

Question 17

Explain how demographics are factors leading to a change in demand

Answer 17

Demographics include age , gender , ethnic mix

Migration has seen an increase in demand for a wide range of goods and services e.g. Housing , public transport and healthcare

Also influences the type of products demanded e.g. Changing tastes of a more diverse nation and different demands for an ageing population

Question 18

Explain how external shocks are factors leading to a change in demand

Answer 18

Unexpected events are those outside of the businesses control but have a direct impact on the level of demand

Eg financial crisis
Flash floods
Outbreak of disease

Question 19

Explain how seasonality affects a change in demand

Answer 19

It exists because of changes in weather and public holidays

It affects demand for

• child care
• confectionary eg Ice cream
• holiday parks
• fashion

Question 20

If the change in demand is caused by any factor other than price , what does it affect

Answer 20

The shift in the demand curve

Question 21

An increase in demand is shown by a shift to the

Answer 21

Right

Question 22

An decrease in demand is show by a shift to the

Answer 22

Left