Chapter 3 - The nature of demand - Key terms

Question 1

Demand

Answer 1

the quantity of a good or service that consumers are willing and able to buy at any possible price in a given period.

Question 2

Derived demand

Answer 2

demand for a factor of production or a good which derives not from the factor or the good itself, but from the goods it produces.

Question 3

Joint demand

Answer 3

demand for goods which are interdependent, such that they are demanded together.

Question 4

composite demand

Answer 4

demand for a product that has more than one use therefore an increase in demand for one product will lead to a decrease in supply for the other product.

Question 5

competitive demand

Answer 5

demand for goods that are in competition with each other and the customer would receive a similar level of satisfaction.

Question 6

ceteris paribus

Answer 6

a latin phrase meaning ‘other things being equal’; it is used in economics when we focus on changes in one variable while holding other influences constant.

Question 7

law of demand

Answer 7

a law that states that there is an inverse relationship between quantity demanded and the price of a good or service, ceteris paribus.

Question 8

demand curve

Answer 8

a graph showing how much of a of a good will be demanded by consumers at any given price.