Market Economy MCQ 1 (Demand)

What is the term for the quantity demanded of a good or service by individual consumers at different prices?

What type of demand refers to the demand for a good or service not for its own sake but for its use in the production of other goods?

What is the term for the demand for goods that are bought and sold together?

What type of demand is supported by the necessary purchasing power?

What is the term for a table that shows the quantities of a good or service that would be demanded by consumers at different prices?

What type of goods are exceptions to the law of demand, where a rise in price leads to an increase in demand?

What is the term for goods that are essential items with little to no substitutes, and a rise in price leads to an increase in demand?

What type of demand is affected by expectations, such as future prices?

What is the term for the total quantity of a good or service that would be demanded by all consumers at different prices?

What type of demand refers to the demand for goods that have more than one use?

Types of Demand

Individual Demand: The quantity demanded of a good or service by individual consumers at different prices.
Market Demand: The aggregate quantity of a good/service that would be demanded by all consumers at different prices.
Derived Demand: Applies to factors of production, where demand for a good is not for its own sake but for its use in the production of other goods.
Composite Demand: Applies where goods have more than one use, and an increase in demand for one product can result in a fall in supply for another.
Joint Demand: Refers to complementary goods that are bought and sold together, such as fish and chips.
Effective Demand: Demand that is supported by the necessary purchasing power, referring to the willingness and ability of consumers to purchase goods/services at different prices.

Demand Schedule

A table that gives the quantities of a good/service that would be demanded by consumers at different prices.

Exceptions to the Law of Demand

Snob Goods/Veblen Goods

The high price of these goods makes them attractive to those who can afford them.
A rise in price could lead to a rise in consumption.

Giffen Goods

Essential items with little to no substitutes.
Those on low income purchase them.
When price rises, demand also rises, e.g. in the 1800s, if the price of bread rose, demand for bread also rose as people had to replace their one meal of meat with another meal of bread.

Goods Affected by Expectations

When property prices begin to fall, consumers may hold off on buying as they wait for prices to fall further.

This quiz covers the different types of demand, including individual demand, market demand, derived demand, and composite demand, in the context of economics and microeconomics.