Demand.

Question 1

What is demand

Answer 1

The quantity of a good or service that consumers are willing and able to buy given its price, the price of other goods, and consumers’ incomes and preferences.

Question 2

What are the four things affecting demand?

Answer 2

• The price of the good
• The income of the consumer.
• The price of substitutes.
• The consumers preferences.

Question 3

What is joint demand?

Answer 3

The demand for goods that are interdependent, so that they are usually demanded together.

Question 4

What is composite demand?

Answer 4

The demand for a good that has multiple uses.

Question 5

What is competitive demand?

Answer 5

The demand for goods that are competition with each other.

Question 6

Give an example for joint demand.

Answer 6

Burger and ketchup sachet.

Any thing where the two goods and service would’ve been bought together.

Question 7

Give an example for composite demand.

Answer 7

Water.

A good or service that can be utilised in multiple different ways.

Question 8

Define ceteris paribus.

Answer 8

Meaning - “ all other things being equal “ -

Where a change in one variable will cause a new equilibrium.

Question 9

What is the law of demand?

Answer 9

A law that states there is a inverse relationship between quantity demanded and the price of a good or service.

Question 10

What is the demand curve?

Answer 10

A graph that shows how much a good will be demanded by consumers at any given price.

Question 11

What is the real income effect?

Answer 11

Where a person who buys a good will end up with less income when the good is priced higher.

Question 12

What is the substitution effect?

Answer 12

Where goods seem less attractive with a increase in price, therefore the good is more likely to be substituted.

Question 13

What assumptions are made to simplify the demand curve?

Answer 13

It assumes substitutes will be priced with consistency, so that quantity demanded is linear with respect to price.

Question 14

What do demand curves shift?

Answer 14

Because of a change in a non-price factor, shown through price not changing rather quantity demanded changing.

Question 15

What causes a movement along the demand curve?

Answer 15

A change in price would cause a movement along the demand curve.

Question 16

What is the snob effect?

Answer 16

The idea that the demand curve may become more sloped because people may be more willing to buy a good because the price is high.

Question 17

What is a normal good?

Answer 17

A good where the quantity demanded increases in response to an increase in consumer incomes.

Question 18

What is an inferior good?

Answer 18

A good where the quantity demanded decreases in response to an increase in consumer incomes.

Question 19

What is a griffin good?

Answer 19

A good that when in composite demand with another good, a decrease in the price of one good will lead to a increase of demand in the other good.

Question 20

What is a substitute good?

Answer 20

When two goods are said to be substitues if consumers regard them as alternatives, so that demand for one good is likely to rise if the price of the other good rises.

Question 21

What are complimentary goods?

Answer 21

Where two goods are consumed jointly so that an increase in the price of one good causes demand for the other good to fall.

Question 22

If demand for one complimentary good falls, what will happen to the demand for the other good?

Answer 22

It will also fall

Question 23

If demand for one substitute good falls, what will happen to the demand for the other good?

Answer 23

The demand for the other good would rise.

Question 24

Are people more or less likely to respond to a change in price as time passes?

Answer 24

More

Question 25

What causes a movement along the demand curve?

Answer 25

A change in price.

Question 26

What the difference between an inferior and normal good?

Answer 26

An normal good will have demand grow when consumer incomes grow.
An inferior good will have demand shrink when consumer incomes grow.

Question 27

What is consumer surplus?

Answer 27

The value that consumers gain from consuming s good or service over and above the price paid.