1.2.1 Demand

Question 1

demand

Answer 1

no of consumers willing and able to purchase a good or service at a given price

Question 2

Demand curve

Answer 2

relationship between price and quantity demanded
shows quantity demanded for a good at any given price over period of time

price changes - movement along curve - inverse relationship

change in any factor other than price e.g tastes shown by shift in demand curve (increase demand = seen as shift in demand)

decrease price = increase quantity demanded
increase price = decrease quantity demanded

Question 3

ceteris paribus

Answer 3

all other things being equal

Question 4

complementary goods

Answer 4

bought in conjunction with each other

e.g. cars and petrol

Question 5

normal goods

Answer 5

ones for which sales move in line with changes in consumer incomes e.g. sales at dry cleaner

Question 6

inferior goods

Answer 6

sales fall when people are better off

rise when consumers struggling financially

Question 7

DEMAND

Answer 7

SHIFT

Question 8

PRICE

Answer 8

MOVEMENT

Question 9

luxury goods

Answer 9

sales rise rapidly when people are better off

may fall rapidly in hard times

Question 10

substitutes

Answer 10

products/services in competitions with each other
customers sub one for another
e.g. cadbury/galaxy

Question 11

6 determinants of demand (change in demand)

Answer 11

1. tastes (consumer preferences)
   times, personal, experience/culture/mood/season
2. advertising/branding
   change tastes, awareness, loyalty
3. income (reward for economic activity)
   quantity demand is physically limited by income
4. population
   size/age/different demographics
5. substitutes (alternatives)
   price of one increase = demand of other increase
   goods in competition = replacement
6. complementary products (used together/complement)
   price of one increase = demand of other decrease

Question 12

shift

Answer 12

anything to do with demand change curve moves

Question 13

price

Answer 13

movement chose a different price point (dotted lines)