1.2.1 Demand

Question 1

demand definition

Answer 1

the amount society is willing and able to buy at a set price

Question 2

what is a normal good

Answer 2

a good where if price rises demand will fall and the opposite

Question 3

rules for drawing demand curve

Answer 3

label y axis price and x axis quantity

draw line downward sloping from left to right and label D

to find price draw dotted line from quantity then to price label p and Q

Question 4

what is a change in price from p to p1 shown by

Answer 4

a movement along the demand curve

Question 5

what causes movement along demand curve

Answer 5

change in price

Question 6

what causes a shift of the demand curve

Answer 6

change in any other factor

Question 7

factors that cause a shift in demand curve

Answer 7

P- population (demographics too)
A- advertising
S- substitutes
I- income
F- fashions / trends
I- interest rates
C- compliments
E- external shocks
S- seasons

Question 8

what happens if income increases to demand of different types of goods

Answer 8

normal goods=
necessities : less likely demand will change

luxuries: customers able to afford more so increase demand

inferior goods : if income increase demand may decrease as customers may switch to better quality products

Question 9

how does population change demand (think demographics)

Answer 9

migration has seen an increase in demand for housing and public transport etc

demographics influence type of products demanded (eg diff demands for ageing population)

Question 10

what happens to demand curve after increase in demand due to another factor (not price)

Answer 10

increase in demand shown by a shift to right

Question 11

what happens to demand curve after decrease in demand due to another factor (not price)

Answer 11

decrease in demand shown by a shift to left

Question 12

what is it called when there is a movement down the demand curve (to the right)

Answer 12

an extension in demand

Question 13

what is it called when there is a movement up the demand curve (to the left)

Answer 13

contraction in demand