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Questions and Answers
What is a demand schedule?
A table that shows the relationship between the price of a good and the quantity demanded.
What is a demand curve?
A graphic representation of a demand schedule.
What does demand refer to?
The desire to own something and the ability to pay for it.
What is the law of demand?
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What are complements?
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What are substitutes?
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Study Notes
Demand Schedule and Related Concepts
- A demand schedule is a table that illustrates the correlation between the price of a good and the quantity demanded by consumers.
- The demand curve visually represents the demand schedule, plotting price on the vertical axis and quantity on the horizontal axis.
Key Definitions
- Demand refers to the willingness and ability of consumers to purchase a good or service.
- The law of demand states that as prices decrease, the quantity demanded increases, and conversely, as prices increase, the quantity demanded decreases. This phenomenon is also known as the price effect.
Types of Goods
- Complements are two goods that are typically consumed together, where an increase in the price of one leads to a decrease in demand for the other.
- Substitutes are products that can replace each other; an increase in the price of one substitute can lead to an increase in demand for the other.
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Description
This quiz explores the demand schedule, the law of demand, and the distinction between complements and substitutes. It will test your understanding of how price affects consumer demand and the graphical representation of demand curves.
