Demand

Question 1

Conditions of demand

Answer 1

Factors other than price, such as income or the price of other goods, which leads to changes in demand and are associated with shifts in the demand curve

Question 2

Contraction of demand

Answer 2

When quantity demanded for a good falls because it’s price rises; it is shown by a movement up the demand curve

Question 3

Demand curve

Answer 3

The line on a price/quantity diagram which shows the level of effective demand at any given price

Question 4

Demand or effective demand

Answer 4

The quantity purchased of a good at any given price, given that other determinants of demand remain unchanged

Question 5

Extension of demand

Answer 5

When quantity demanded for a good increases because it’s price falls; it is shown by a movement down the demand curve

Question 6

Law of diminishing marginal utility

Answer 6

The value of utility that individual consumers gain from the last product consumed falls the the greater the number consumed. So the marginal utility of consuming the sixth product is lower than the second product consumed

Question 7

Shifts in the demand curve

Answer 7

A movement of the whole demand curve to the right or left of the original caused by a change in any variable affecting demand except price

Question 8

Derived demand

Answer 8

The demand that comes from the demand for something else