Demand in a market

Question 1

What is demand?

Answer 1

The amount that a consumer is willing and able to buy at each given price level

Question 2

Why is the demand curve downward sloping?

Answer 2

As prices rise, demand will fall because consumers may be unable or unwilling to buy at that certain price level

Question 3

What causes a movement along the demand curve?

Answer 3

A change in price

Question 4

If the price falls, what happens to the demand curve?

Answer 4

There will be an extension in demand

Question 5

If the price rises, what happens to the demand curve?

Answer 5

There will be a contraction in demand

Question 6

What are the factors that cause demand to shift?

Answer 6

Population
Advertising
Substitutes 
Income
Fashion
Compliments

Question 7

What is a normal good?

Answer 7

Goods or services that will see an increase in demand when income rises

Question 8

What is an inferior good?

Answer 8

Goods or services that will see an decrease in demand when income rises

Question 9

What are complementary products?

Answer 9

Goods that are consumed together

Question 10

What is composite demand?

Answer 10

A good that is demanded for more than one purpose

Question 11

If 2 products have composite demand, the increase in demand for one good will lead to…

Answer 11

A reduction in the available supply for the other good

Question 12

What is derived demand?

Answer 12

When the demand for one good comes from the demand for another good