Flashcards
2 ~ Demand
Cards in this deck (17)
- 1Define demandthe quantity of a good/service consumers are willing and able to buy at a given price in a given time period
- 2Define utilitythe individual demand at a certain value we place on a product usually linked to usefulness or enjoyment
- 3Define effective demandwhen a desire to buy a product is backed up by an ability to pay for it
- 4Define derived demandthe demand for a factor of production used to produce another good/service
- 5What is an example of derived demand?steel:
strongly linked to the market demand for cars and construction of new buildings - 6What is the law of demand?inverse relationship between price of a good and demand for it
1. if prices fall, demand rises
2. if prices rise, demand falls - 7What does the demand curve show?the relationship between the price of an item and the quantity demanded over a period of time
- 8What is the income effect?when the P of a good falls because the consumer can maintain the same C for less expenditure (provided the good is a normal, some of the resulting ↑Y is used to buy the product)
↓P = ↑Y = ↑D - 9As ↓P, a consumers.. (3)willingness to pay ↑
opportunity cost of purchasing ↓
switches away from rival products - 10What are some conditions of demand? (6)changing P of substitutes (competitive D)
changing P of complements (joint D)
changes in consumers Y
ir
effects of advertising and marketing
seasonal factors - 11What is marginal utility?the change in satisfaction from consuming one extra unit of a good or service
- 12What is the law of diminishing returns?marginal utility decreases as more units are consumed
- 13Why is the D curve downward sloping?because after a certain point, marginal utility will start to fall (diminish)
- 14What is seasonal D?seasonality refers to fluctuations in D related to months of the year
- 15What is an example of seasonal D?↑D for ice cream in summer
- 16What are social factors of D? (3)awareness (e.g. health risks)
social norms
social pressures - 17What are emotional factors of D? (2)times of insecurity
strong emotional attachment
Information
- Description
- AS - Level Economics (Microeconomics) Flashcards on 2 ~ Demand, created by Tara Pugal on 15/01/2016.
- Created by
- Tara Pugal · Jan 2016
- Updated
- May 15, 2016
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