2.2 Demand Flashcards
1
Q
What is demand?
A
The quantity consumers are willing and able to buy at a given price
2
Q
What is effective demand?
A
When desire to buy a product is backed up by an ability to pay
3
Q
What is derived demand?
A
Demand for a factor of production in order to produce another product
4
Q
What is the basic law of demand?
A
Inverse relationship with price - a rise in price leads to a fall in demand
5
Q
Why is the demand curve downward sloping?
A
1) Income Effect
2) Substitution Effect
3) Law of Diminishing Marginal Utility
6
Q
Conditions of demand?
A
PASIFIC
7
Q
What is joint demand?
A
When demand for one product is positively related to demand for another product
8
Q
What is composite demand?
A
Where a product has more than one use
