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Questions and Answers
Which factor is least likely to affect the demand for a commodity?
Which factor is least likely to affect the demand for a commodity?
What type of demand occurs when two commodities are needed together?
What type of demand occurs when two commodities are needed together?
Which of the following represents effective supply?
Which of the following represents effective supply?
In an individual supply schedule, what happens to quantity supplied as price decreases?
In an individual supply schedule, what happens to quantity supplied as price decreases?
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Which of these does not typically influence the price of a commodity?
Which of these does not typically influence the price of a commodity?
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Derived demand is primarily associated with which scenario?
Derived demand is primarily associated with which scenario?
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What is the primary characteristic of composite demand?
What is the primary characteristic of composite demand?
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Which of the following options best describes a supply schedule?
Which of the following options best describes a supply schedule?
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What does a market supply schedule represent?
What does a market supply schedule represent?
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According to the law of supply, what happens to the quantity supplied as prices increase?
According to the law of supply, what happens to the quantity supplied as prices increase?
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Which type of supply occurs when commodities are produced from a single source?
Which type of supply occurs when commodities are produced from a single source?
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What would likely happen to the supply of land for farming if building development increases?
What would likely happen to the supply of land for farming if building development increases?
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In the market supply schedule for sugar, how much total quantity is supplied when the price is set at N150?
In the market supply schedule for sugar, how much total quantity is supplied when the price is set at N150?
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Which factor is NOT a determinant of supply?
Which factor is NOT a determinant of supply?
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How does technological development generally affect supply?
How does technological development generally affect supply?
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Which of the following prices per packet corresponds to the highest total quantity supplied?
Which of the following prices per packet corresponds to the highest total quantity supplied?
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What does effective demand refer to?
What does effective demand refer to?
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According to the law of demand, what happens when the price of a commodity decreases?
According to the law of demand, what happens when the price of a commodity decreases?
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What type of demand schedule shows the quantities demanded by all consumers at various prices?
What type of demand schedule shows the quantities demanded by all consumers at various prices?
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In Mr. Austin's individual demand schedule for milk, how many tins would he demand at a price of N60?
In Mr. Austin's individual demand schedule for milk, how many tins would he demand at a price of N60?
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What does a demand curve illustrate?
What does a demand curve illustrate?
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At a price of N40 per tin, what is the total quantity demanded for milk by the four consumers listed?
At a price of N40 per tin, what is the total quantity demanded for milk by the four consumers listed?
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Which statement correctly describes an individual demand schedule?
Which statement correctly describes an individual demand schedule?
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What can be inferred from the statement, 'Ceteris paribus' related to the law of demand?
What can be inferred from the statement, 'Ceteris paribus' related to the law of demand?
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Study Notes
Demand
- Demand refers to the quantity of a commodity consumers are willing and able to purchase at a specific price and time.
- Effective demand is a want or need supported by the willingness and ability to pay.
- Law of demand states: Higher price = lower quantity demanded; lower price = higher quantity demanded (ceteris paribus).
- Demand schedule is a table showing the relationship between price and quantity demanded.
- Individual demand schedule: Shows quantities a single consumer would buy at different prices.
- Market (aggregate) demand schedule: Shows total quantities all consumers would buy at different prices.
Demand Schedule for Milk (Mr. Austin)
- Shows quantities Mr. Austin would buy at various milk prices.
| Price per tin (N) | Quantity Demanded |
|---|---|
| 100 | 10 |
| 80 | 20 |
| 60 | 25 |
| 40 | 30 |
Market Demand Schedule (Milk)
- Shows total quantities all consumers would buy at various prices.
- Includes individual demand quantities of multiple consumers.
Demand Curve
- Graph showing the relationship between price and quantity demanded at any point in time.
- Curve slopes downwards, illustrating inverse relationship.
Factors Affecting Demand
- Price of the commodity
- Price of other commodities
- Government policy
- Taste and fashion
- Consumer income
- Weather and climate
- Advertising spending
- Population size
- Price expectations
Types of Demand
- Complementary demand: Two or more commodities needed together (e.g., car and petrol).
- Competitive demand: Close substitutes (e.g., tea and coffee).
- Derived demand: Demand for a commodity to produce another (e.g., flour to make bread).
- Composite demand: A commodity used for multiple purposes (e.g., palm oil for cooking and making soap).
Supply
- Supply is the quantity of a commodity sellers are willing and able to offer for sale at a particular price and time.
- Effective supply: Part of total production offered at ruling market price.
- Supply schedule: Table showing quantity supplied at different prices.
- Individual supply schedule: Shows quantities one supplier would offer at various prices.
- Market (aggregate) supply schedule: Shows total quantities all suppliers would offer at various prices.
- Individual Supplier Schedule (Sugar for Mr. Gbenga):
| Price per packet (N) | Quantity Supplied per week |
|---|---|
| 250 | 100 |
| 200 | 80 |
| 150 | 60 |
| 100 | 40 |
| 50 | 20 |
Market Supply Schedule (Sugar)
- Shows total quantities all suppliers would offer at various prices.
Supply Curve
- Graph showing relationship between price and quantity supplied.
- Curve slopes upwards, illustrating direct relationship
Factors Affecting Supply
- Prices of other commodities
- Taxation
- Weather
- Number of producers
- Government policies
- Technological advancements
Law of Supply
- Higher price = higher quantity supplied
- Lower price = lower quantity supplied
Types of Supply
- Composite supply: Commodity with multiple uses
- Competitive supply: Commodity with alternative uses (e.g., land for farming or housing)
- Joint supply: Two or more commodities produced together (e.g., beef and hides)
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Description
Test your understanding of demand concepts in economics, including the law of demand and different types of demand schedules. This quiz covers effective demand, individual demand schedules, and market demand schedules using practical examples like milk. Challenge yourself with questions that assess your grasp on these fundamental economic ideas.
