EC2 Lesson 2.1: Intro to Demand and supply Flashcards
It is relationship between price and quantity demanded. It is defined as the quantity of goods and services that the consumers are willing and able to buy.
Demand
two forms of demand
Demand schedule
Demand curve
It is the tabular presentation showing the price and quantity demanded for a particular good.
Demand schedule
This schedule shows the different quantities that will be bought by buyers at each of the given prices.
Demand schedule
It is the curve that shows relationship between price and quantity demand.
Demand curve
This is the graphical presentation of the demand schedule.
Demand curve
This is ________ which implies that there is an inverse relationship between price and quantity demanded.
downward sloping
The ________ of the demand curve comes from the fact that when price decreases, it will bring new buyers.
negative slope
Changes brought by Price Factor
- Movement along the Demand Curve/Change in Quantity Demanded
- Shift of the Demand Curve/Change in demand
This will happen if the price factor has been changed. The changes occur based on the situation that the demand curve remains its position but the point will move along the curve. The point moves from point A to point B. When price of commodity X increases, quantity demanded will decrease.
Movement along the Demand Curve/Change in Quantity Demanded
occurs when the non-price factor changed.
Shift of the Demand Curve
Non-Price Factors Affecting Demand
A. Number of Buyers or Population
B. Income
C. Taste and preference
D. Expectation
E. Price of Related Commodity
Demand is the relationship between price and quantity demanded by all consumers in the market. If the number of consumers increases, then demand will also increase. The demand curve will shift to the right.
Number of buyers or population
It is the amount of money that the individual or household receives in providing the factors of production.
Income
Income is divided into
Disposable
Non-disposable
It is part of income used by individual to purchase the goods and services the individual or household needed. It is the one considered most by the economist whether there will be changes in demand curve or not.
Disposable income
It is part of income that is not use by household or individual for their consumption. This is the part of income that is being saved for future purposes. Sometimes, it became an investment of household or individual in the future.
Non-disposable
Income has ______ or ________ relationship with the demand for normal good
positive or direct
income has ______ or _____ relationship with the demand for inferior good.
negative or inverse
It is the behavior of consumer which is affected by weather, perception, information, occasion among others.
taste and preference of consumer.
If people expect the price of good to increase, they will want to buy it more at present before the price increases. Conversely, if the people expect a price decline, they will purchase less of that good at present.
expectation of the consumer
One of non-price factor that affect the demand curve is the__________ which includes substitute goods and complementary goods.
price of related commodity
_________ are those commodities which they perform the same function and can satisfy the same needs and wants. These goods are used to take the place of another good.
Substitute Goods
These are goods which complements each other and are used together.
complementary goods
if the changes that occur is brought by price factor, change in __________ or __________ along the demand curve occur
quantity demanded or movement
if the changes that occur are brought by non-price factors, __________ will shift
demand curve
demand curve is called
change in demand or shift of the demand curve.
