Demand

Question 1

what is demand

Answer 1

quantity of a good or service that consumers are willing and able to buy at a given price at a particular time.

Question 2

what is market

Answer 2

price where goods and services are exchanged by consumers and producers

Question 3

what are submarkets

Answer 3

smaller markets make up bigger markets

Question 4

change in price=?
price reduction=
price increase=

Answer 4

leads to movement
reduction=extension decrease
contraction=increase

Question 5

demand depends on which 2 things

Answer 5

income effect- income less cannot get
substitution effect- income less get this
e.g. Lamborghini to audi

Question 6

what causes shift in demand

Answer 6

PASIFIC
pop
advert
substiture
income, fashion,  interest rates, consumer confidence

Question 7

4 types of goods

Answer 7

normal good- rise in real income demand increase
inferior good-rise in real income demand decrease
substitute goods:goods that replace another product
complementary goods:goods in joint demand

Question 8

types of demand

Answer 8

derived d= goods demanded increase ONLY BECAUSE needed for other production of other goods
e.g. workers in car factory= cars

composite d= when increase in d for one good causes decrease in d for another good
e.g. oil in plastics decreases oil for petrol

joint d= when increase in d for good x causes increase in d for good y

Question 9

what is diminishing marginal utility

Answer 9

decline in the additional sarisfaction a person derives from consuming extra additional unit of that product