What is demand?
The quantity of a good consumers are willing and able to buy at different prices.
What is the law of demand?
As price rises quantity demanded falls ceteris paribus.
What does ceteris paribus mean?
All other factors remaining constant.
What causes a movement along the demand curve?
A change in price.
What causes demand to increase?
Higher income population growth advertising or price rise of substitutes.
What causes demand to decrease?
Lower income changing tastes or price fall of substitutes.
What is a substitute good?
A good that can replace another good.
Example of substitutes?
Tea and coffee.
What is a complementary good?
A good consumed together with another good.
Example of complements?
Cars and petrol.
What happens to demand for normal goods when income rises?
Demand increases.
What happens to demand for inferior goods when income rises?
Demand decreases.
What is derived demand?
Demand for a factor of production resulting from demand for final goods.
Example of derived demand?
Demand for construction workers due to housing demand.
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1.1 The Economic Problem25
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1.2 The Allocation Of Resources9
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1.3 Opportunity Cost14
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2.1 Specialisation and Trade9
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2.2 Demand14
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2.3 Supply10
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2.4 Consumer And Producer Surplus13
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2.5 The Interaction Of Markets8
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2.6 Elasticity17
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2.7 The Concept Of The Margin16
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2.8 Market Failure And Externalities23
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2.9 Information Failure8
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2.10 Public Goods8
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2.11 Government Intervention16
