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Questions and Answers
What is the meaning of demand, as discussed in the text?
What is the meaning of demand, as discussed in the text?
Demand refers to more than simply a desire for a product. It involves the combination of desire, ability, and willingness to purchase it.
What is Microeconomics and how does it relate to demand?
What is Microeconomics and how does it relate to demand?
Microeconomics delves into the decision-making behavior of individuals and businesses. It helps explain how prices form and individuals make economic choices, directly impacting the concept of demand.
In the text, 'demand' is defined as the desire to simply have or own an item.
In the text, 'demand' is defined as the desire to simply have or own an item.
False (B)
What is a market economy, and how does it relate to demand?
What is a market economy, and how does it relate to demand?
What is the main takeaway regarding demand as a concept?
What is the main takeaway regarding demand as a concept?
The Law of Demand states that the quantity demanded of a good or service ______ with its price.
The Law of Demand states that the quantity demanded of a good or service ______ with its price.
What is meant by the term 'marginal utility'?
What is meant by the term 'marginal utility'?
What is the key difference between the demand schedule and the demand curve?
What is the key difference between the demand schedule and the demand curve?
The demand curve is generally depicted as an upward-sloping line.
The demand curve is generally depicted as an upward-sloping line.
What does the Law of Demand state?
What does the Law of Demand state?
According to the Law of Demand, higher prices lead to higher quantities demanded.
According to the Law of Demand, higher prices lead to higher quantities demanded.
What can be inferred about consumer behavior during sales?
What can be inferred about consumer behavior during sales?
The _____ demand curve shows the total quantities demanded by all consumers interested in a product.
The _____ demand curve shows the total quantities demanded by all consumers interested in a product.
Match the concepts with their definitions
Match the concepts with their definitions
What is the reason economists call the relationship between price and quantity demanded a 'law'?
What is the reason economists call the relationship between price and quantity demanded a 'law'?
The Law of Demand applies only to luxury items.
The Law of Demand applies only to luxury items.
What two factors contribute to the understanding of the Law of Demand?
What two factors contribute to the understanding of the Law of Demand?
What does the law of demand suggest about the relationship between price and quantity demanded?
What does the law of demand suggest about the relationship between price and quantity demanded?
Diminishing marginal utility implies that as a person consumes more units of a product, their satisfaction from each additional unit tends to increase.
Diminishing marginal utility implies that as a person consumes more units of a product, their satisfaction from each additional unit tends to increase.
What is the term used to describe the additional satisfaction a person receives from using one more unit of a product?
What is the term used to describe the additional satisfaction a person receives from using one more unit of a product?
As we buy more of a product, we experience __________ in satisfaction from each additional unit.
As we buy more of a product, we experience __________ in satisfaction from each additional unit.
Match the following economic principles to their definitions:
Match the following economic principles to their definitions:
If Mike and Julia buy a second CD, what are they likely to experience in terms of satisfaction?
If Mike and Julia buy a second CD, what are they likely to experience in terms of satisfaction?
The demand curve is typically upward-sloping due to diminishing marginal utility.
The demand curve is typically upward-sloping due to diminishing marginal utility.
Why might a consumer not be willing to pay as much for the second unit of a product?
Why might a consumer not be willing to pay as much for the second unit of a product?
Flashcards
Demand
Demand
The desire, ability, and willingness to purchase a good or service.
Microeconomics
Microeconomics
The branch of economics that studies individual economic decisions and behavior.
Market Economy
Market Economy
A system where individuals and firms make decisions in their own self-interest to answer the basic economic questions: What, How, and For Whom?
Demand Schedule
Demand Schedule
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Demand Curve
Demand Curve
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Law of Demand
Law of Demand
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Market Demand Curve
Market Demand Curve
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Marginal Utility
Marginal Utility
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Diminishing Marginal Utility
Diminishing Marginal Utility
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Complements
Complements
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Substitutes
Substitutes
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What's the Law of Demand?
What's the Law of Demand?
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What is the market demand curve?
What is the market demand curve?
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Why is the “Law of Demand” a law?
Why is the “Law of Demand” a law?
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What is microeconomics?
What is microeconomics?
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Why is the demand curve downward sloping?
Why is the demand curve downward sloping?
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How does the principle of diminishing marginal utility explain the price we pay for another unit of a good or service?
How does the principle of diminishing marginal utility explain the price we pay for another unit of a good or service?
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Study Notes
Chapter 4: Demand - Lesson 1
- Demand is expressed when a consumer is both willing and able to purchase a product.
- Demand is more than just wanting an item; it involves the desire, ability, and willingness to pay.
Content Vocabulary
- Demand: (p. 91) The desire, ability, and willingness to buy a product in a marketplace.
- Microeconomics: (p. 91) The part of economic theory that deals with the behavior & decision-making of individual consumers and firms.
- Market economy: (p. 92) An economy where individuals and firms act in their self-interest to answer economic questions like what to produce, how to produce it, and for whom.
- Demand schedule: (p. 92) A table showing the quantity demanded of a product at different prices.
- Demand curve: (p. 93) A graph illustrating the relationship between the price of a product and the quantity demanded. It is downward-sloping.
- Law of Demand: (p. 93) The concept that the quantity demanded of a good or service varies inversely with its price (other factors constant).
- Market demand curve: (p. 94) The sum of all individual demand curves in a market.
- Marginal utility: (p. 95) The extra satisfaction a consumer gains from consuming one more unit of a good or service.
- Diminishing marginal utility: (p. 95) The principle that the extra satisfaction from consuming each additional unit of a good or service decreases as consumption increases.
Main Idea
- Demand is a concept that specifies the various quantities of a product that will be bought at differing prices (in certain conditions).
Economics & You
- Consumers generally buy more of something when its price is lower and less when its price is higher.
Demand illustrated
- The demand concept is easy to understand as it only involves two variables: Price and quantity of a product.
Demand schedule and Demand curve
- The demand schedule and demand curve show the quantity of a good/service demanded at every possible price.
- A demand curve shows the quantity demanded at each price.
The Individual Demand Curve
- The demand schedule in one section of a figure can be presented graphically as a downward-sloping line in another section.
- The points on the schedule are transferred to the graph and connected to create the curve.
- The curve reflects the quantity demanded at every possible price.
- Example usage: point ‘a’ on the graph means three CDs were purchased at $15 each.
The Assumptions Of The Law Of Demand
- Price of related goods remains constant.
- Income of the consumer remains constant.
- Taste and preferences of the consumer remain constant.
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