Demand and the factors affecting demand curve

Question 1

Define demand

Answer 1

the willingness and ability of consumers to buy a product at a given price

Question 2

What does the law of demand state?

Answer 2

states that as the price of a product increases the total quantity demanded
decreases.

Question 3

What is disposable income

Answer 3

the amount of income that a household has received in exchange for their labour after income tax has been paid, income minus income taxes.

Question 4

What factors affect demand?

Answer 4

disposable income, tastes and preferences, interest rates, prices of substitutes and compliments, changes in population, consumer confidence

Question 5

What is consumer confidence

Answer 5

A measure of the general expectations about the future state of the economy held by individuals.

Question 6

What are tastes and preferences

Answer 6

Demand may be affected by an individual’s tastes, attitudes and preferences towards each good or service

Question 7

What is population change

Answer 7

Refers to the changes in the size of the population, as well as demographic changes including age, cultural factors, socio-economic considerations

Question 8

Price of compliments and substitutes

Answer 8

Complementary products are generally consumed together. They are products that are sold separately but are used together, each creating a demand for the other. a substitute is a viable good or service that may be used instead of the production in question