Demand Flashcards
Economics
The study of people’s behaviours when faced with unlimited wants but limited means.
Needs
Things we must have in order to survive.
Wants
The things we desire but are not essential for survival.
Free goods
Goods or services where enough is avaliable to satisfy desire for them. (abundant) Therefore users do not need to pay for them. e.g. sunshine
Economic goods
Goods or services where there is not enough to satisfy the desire for them (scarce). This means users need to pay for them. e.g. bread
Scarcity
A situation where there is not enough of a good or service to satisfy everybody’s demand for it. (A result of limited means but unlimited wants.)
Choice
A decision between two or more options.
Opportunity cost
The next best alternative foregone.
Values
Beliefs and principles that people hold as important and influence our choices
e.g. how we will spend our time or money.
Demand
The quantity of a good or service that consumers are willing and able to purchase at various prices, in a given time period.
Demand schedule
A table showing the quantity demanded at each price level.
Demand curve
A graph showing the quantity demanded at each price level.
*The law of demand
When the price of a good or services increases, the quantity demanded decreases, vice versa and assuming ceteris paribus.
Ceteribus paribus
All other things being equal. For Demand, this means no change in tastes, income, or the prices of complements or substitutes. (TICS factors)
Income
The money that is earned or unearned / the earnings of an individual
