Demand Flashcards
1
Q
What is demand
A
Quantity of good or service consumers are willing to buy at a given price in a given time period
2
Q
What is the law of demand
A
There is an inverse relationship between price and quantity demanded
3
Q
What is ceteris paribus
A
All other factors remain unchanged
4
Q
What is contraction of demand
A
Movement left on the demand curve
5
Q
What is extension of demand
A
Movement right on the demand curve
6
Q
What is the income effect
A
As prices change, disposable income allows us to buy more or less
7
Q
What is the substitution effect?
A
As price goes up, other products become price competitive and we switch to buy these products
8
Q
Which factors shift demand
A
Population
Advertising
Substitute prices
Income
Fashions
Interest rates
Complements
