Ch-3: Demand

Question 1

Define:

Demand

Answer 1

Effective demand is the willingness and the ability to buy a product

Question 2

What is the relationship between demand and price?

Answer 2

If price is high, Demand will be low
If price is low, Demand will be high

Question 3

Define:

Market demand

Answer 3

Market demand is the total demand for the product at different prices

Question 4

Define:

Aggregation(Sum)

Answer 4

The addition of different components to arrive at a total amount

Question 5

Define:

Extension in demand

Answer 5

An increase in the quantity demanded because of the fall in price of the product

Question 6

Define:

Contraction in demand

Answer 6

A decrease in quantity demanded due to a rise in the price of product

Question 7

Define:

Increase in demand

Answer 7

An increase in quantity demanded, at a given price, causing the demand curve to shift rightwards

Question 8

Define:

Decrease in demand

Answer 8

A decrease in quantity demanded, at a given price, causing the demand curve to shift leftwards

Question 9

What are the causes of changes in demand?

Answer 9

1. Changes in income
2. Changes in price of related product
3. Advertising campaigns
4. Changes in population
5. Change in taste of fashion