Demand - Econ 2302

Tastes and preferences refer to:

The perceived desirability of consuming a good, service, or resource.

For _____ goods, an increase in income increases demand, and and a decrease in income decreases demand.

Normal

Complement are:

Goods that are consumed together.

In a market:

Competition between suppliers tend to drive prices down, and competition between buyers tend to drive prices up.

An increase in the price of a good's _____ will shift the demand curve of the good to the left.

Complement

The price of a _____ of a good is one of the nonprice determinants of its demand.

Complement

A decrease in the price of a good A will cause an increase in the demand for good B when the two good are related as _____.

Complements

More of a good will be demanded at each price if:

Consumers' perceptions of the good improve.

_____ markets are highly structured, whereas _____ markets are less structured, with fewer rules.

Formal and informal

Demand will increase or decrease when income changes, depending on whether the good is a(n) _____ or a(n)_____ good.

Normal; inferior

Market demand is based on the:

Overall preferences of everyone in the market.

Along a demand curve, all else is held constant except the good's _____.

Price

The perceived desirability of consuming a good, service, or resource is the:

Tastes and preferences of buyers.

In a "market", prices and quantities traded are determined mostly by:

The interaction of buyers and sellers in a market.

When we talk about the demand for a product, we are referring to:

The quantity that consumers re willing and able to buy at a variety of different prices all else held constant.

When markets and prices are used to allocate, or ration, goods, services, and resources, the allocation is determined by:

The willingness and the ability to pay the market price.

When markets and prices are used to allocate, or ration, goods, services, and resources, the allocation is determined primarily by:

The willingness and the ability to pay the market price.

Demand will increase if:

- Consumers expect the price to rise in the future. - There are no more buyers. Consumers prefer the product more.

Three different ways of expressing information about the demand for a good, service, or resource are:

- The demand schedule - Demand - The demand curve

In economics, a market describes:

- The interactions of buyers and sellers of one particular good. - A place where buyers and sellers meet. - The type of location where sellers offer goods and buyers purchase them. - The interactions of buyer and sellers of many unrelated goods.

The three main reasons why demand curves are downward-sloping are:

- The substitutional effect - Diminishing marginal utility - The income effect

The change in quantity of a good , service, or resource that consumers, firms, and governments are willing and able to buy due to a change in its price is called:

A change in the quantity demanded

In economics, the word "curve" is typically used to refer to:

Almost any line that graphically represents the relationship between two variables.

An increase in demand signals:

An increase in the quantity demanded at every price, so the curve shifts to the right.

The law of _____ focuses entirely on the effect of change in the good's price on the quantity of the product consumed and holds everything else constant.

Demand

The size of the shift in the _____ curve depends on which non-price determinant (tastes and preferences, income, etc.) changes and ow much it changes.

Demand

The terms "normal" and "inferior"refer to what happens to:

Demand when income changes.

The negative relationship between the quantity of a good, service, or resource and the marginal utility obtained from each additional unit consumed in a given period of time describes:

Diminishing marginal utility

Prices tend to be a(n) _____ mechanism for allocating goods, services, and resources between competing uses y providing important feedback to consumers and producers.

Efficient

Demand, demand curve, and demand schedule re three different ways of:

Expressing information bout the demand for a good, service, or resource.

Markets, such as he New York Stock Exchange and your local retail store, are _____ markets; such markets s swap meets or garage sales are _____ markets.

Formal; informal

As a winter storm approaches, we would expect the demand for:

Generators increase

The _____ effect is the effect that a change in he price of a good, service, or resource has on the purchasing power of income.

Income

For _____ goods, an increase in income decreases demand, and a decrease in income increases demand.

Inferior

The horizontal summation of individual demand curve:

Is the market demand

When the price of a good rises, we can expect that:

Less of the good will be purchased.

When buyers and sellers interact in a market, buyers seek to pay the _____ price possible, and sellers seek to charge the _____ price possible.

Lowest; highest

The "all else held constant" assumption:

Makes it possible to study how a change in only the rice affects the quantity demanded.

Any place where, or mechanism by which, buyers and sellers interact to goods, services, or resources is a _____.

Market

Prices and quantities trade are determined by the interaction of buyers and sellers in a _____.

Market

Prices and quantities traded are determined by the interaction of buyers and sellers in a _____.

Market

The _____ demand represents the horizontal summation of individual demand curves.

Market

A small hatchback car, that is a normal good in a low-income country:

May be an inferior good in high-income countries.

The demand curve will shift when:

Non-price determinants of demand change.

A good for which there is a direct relationship between the demand for the good and income is a(n) _____ good.

Normal

The terms "normal" and "inferior" are:

Not judgments based on the desirably of a good

When we draw a demand curve for hamburgers, we focus only on the _____ of hamburgers and the quantity demanded at each price.

Price

In a word characterized by scarcity, one mechanism for allocating goods, services, and resources between competing uses is a reliance on _____.

Prices

Prices tend to be an efficient mechanism for allocating goods, services, and resources between competing uses by:

Providing important feedback o consumers and producers.

Any item, whether a gift of nature, the result of production, or the result of human effort, that is used to produce goods and services is a:

Resource

A change in price, all else held constant, generates:

A change in quantity demanded, but not a change in demand.

An increase in the price of a good's complement will cause:

A decrease in the demand for the good.

Demand Schedule

A tabular representation of the relationship between the price of good, service, or resource and the quantity that individuals and firms are willing and able to buy, all else held constant.

Good

A tangible product that consumers, firms, or governments wish to purchase.

If consumers expect prices to fall:

Current demand will fall.

_____ seek to pay the lowest price possible and _____ seek to charge the highest price possible.

Buyers; sellers

Buyers

Market participants who seek to obtain goods, services, or resources.

In most markets, _____ are determined by the interactions of numerous buyers and sellers.

Prices

An INTANGIBLE product or action that consumers, firms, or governments wish to purchase is a:

Service

A decrease in the price of a good's _____ will cause a decrease in the demand for the good.

Substitute

_____ are similar and can take the place of another good.

Substitutes

The _____ effect is the effect that a change in the price of a good, service, or resource has on the demand for another.

Substitution

One assumption of a demand curve is that:

The number of buyers in the market is constant.

When drawing a demand curve, we always place price on the _____ axis and quantity demanded on the _____ axis.

Vertical; horizontal

A change in the quantity demanded refers to a:

Movement along the demand curve as the price changes.

Prices of related goods, complements and substitutes , are:

Nonprice determinants of demand.

Expectation

The anticipation by individuals and firms of costs and benefits that lie in the future.

An intangible product or action that consumers, firms, or governments wish to purchase is a:

Service

Two goods are _____ if an increase in price of one good increases the demand for the other.

Substitutes

The demand schedule represents the relationship between the price of a good, service, or resource and the quantity that individuals and firms are willing and able to buy, all else held constant, in _____ form.

Table

Tastes and preferences

The perception of the desirability associated with consuming a good, service, or resource.

When a nonprice determinant changes:

A change in demand occurs, which has the effect of shifting the entire demand curve to the right or left.

A shift of the demand curve is:

A change in demand.

Consumers' _____ play a crucial role in determining the demand for a good or service at different points in time. They can affect demand relationships in the present or the future.

Expectations

Normal goods

Goods for which income and demand move in the same direction.

A change in quantity demanded is:

The change in the quantity of a good, service, or resource that consumers , firms, and governments are willing and able to buy due to a change in its price.

When income decreases:

The demand for an inferior good increases.

The income effect refers to:

The effect that a change in the price of a good or service has on the purchasing power of a consumer's income.

When there is a change in demand:

The entire demand curve shifts to the right or left.

Market

Any place where, or mechanism by which , buyers and sellers interact to trade goods, services, or resources.

In a market:

Buyers and sellers interact to trade goods, services, or resources.

Normal Good

A good of which there is a direct relationship between the demand for the good and income. For normal goods, and increase in income increases demand, and a decrease in income decreases demand.

In economics, when we talk about "the market," we are usually referring to:

A group of buyers and sellers who exchange one specific good, service, or resource, not o a specific place.

If less of a good, service, or resource is being consumed at every price, there is:

A leftward shift of the demand curve.

The law of demand states that:

As the price of a good, service, or resource rises, the quantity demanded will fall, all else held constant.

Tastes and preferences, the number of buyers, and buyer expectations are all nonprice determinants of ______.

Demand

The _____ for a product will change when the prices of the goods that are complements or substitutes for that product change.

Demand

Substitues:

Can take the place of a good.

Consumers expectations play a:

Crucial role in determining the demand for a good or service.

When drawing a demand curve, we always place _____ on the vertical axis and _____ _____ on the horizontal axis.

Price; quantity demanded

A _____ is an intangible product or action that consumers, firms, or governments wish to purchase.

Service

A market cannot exist:

Without individuals and firms that are willing and able to buy a good.

The demand curve is downward-sloping because:

- As consumers purchase substitutes , the quantity demanded of the good falls. - The benefit of consuming more of a good falls with each additional unit, so the price consumers are willing and able to pay also falls with increased consumption. - As prices rise, the purchasing power of each dollar earned falls, and consumers are willing and able to buy less of a good.

The income effect:

- Does not for to change in income. - Refers to change in purchasing power when the price changes.

Three main reasons why demand curves are downward-sloping are:

- The substitution effect - Diminishing marginal utility - The income effect

A change in _____, all else held constant, generates a change in quantity demanded.

Demand

Service

An INTANGIBLE product or action that consumers, firms, or governments wish to purchase.

Increase in demand

An increase in he quantity demanded of a good, service, or resource at every price. Graphically, n increase in demand is represented by a rightward shift of the demand curve.

An increase on the price of a good's substitute will cause:

An increase in the demand for the good.

Substitutes

Goods, services or resources that are viewed as replacements for one another.

The demand schedule displays the demand for a product:

In a table showing the different prices and the corresponding quantities demanded.

If the number of buyers increase, the demand will:

Increase and shift to the right.

If there is a leftward shift of the demand curve, you can conclude that demand has _____.

Decreased

The demand curve is sloping because:

- As consumers purchase subtitles , the quantity demanded of the good falls. - As prices rise, the purchasing power of each dollar earned falls, and consumers are willing and able to buy less of a good. - The benefit of consuming more of a good falls with each additional unit, so the price consumers are willing and able to pay also falls with increased consumption.

A decrease in demand means:

A decrease in the quantity demanded at every price, so the curve shifts to the left.

Suppose hat your income remains unchanged, but the price of gasoline decreases. You can afford to purchase more gasoline, because there has been:

A downward movement along your existing demand curve, which is partially explained by the income effect.

Law of Demand

A law in economics that states that as the price of a good, service, or resource rises, the quantity demanded will fall, and vice versa, all else he'd constant.

Resource

Any item, whether a gift of nature, the result of production, or the result of human effort, that is used to produce goods and services.

Consumer expectations play a crucial role in determining the ______ for a good or service.

Demand

Market _____ is based on the overall preferences of everyone in the market.

Demand

A graphical representation of the relationship between the price of good, service, or resource and the quantity that individuals and firms are willing and able to buy, all else held constant describes the:

Demand curve

An increase in the price of a good's complement will shift the:

Demand curve of the good to the left.

An increase in the price of a good's substitute will shift the:

Demand of the good to the right.

A tabular representation of the relationship between the price of a good, service, or resource and the quantity that individuals and firms are willing and able to buy, all else held constant, describes the:

Demand schedule

When income changes:

Demand will shift right or left.

Because the benefit of consuming more of a good falls with each additional unit, the price consumers are willing and able to pay also falls with increased consumption. This scenario describes:

Diminishing marginal utility

Generally, in a perfectly competitive market:

Individuals do not directly influence the prices, but collectively all individuals ave an effect on price.

A good for which there is an inverse relationship between the demand for the good and income is (n) _____ good.

Inferior

A good for which there is an inverse relationship between the demand or the good and income is a(n) _____ good.

Inferior

When we graph the relationship between price and quantity demanded:

We call the react a demand curve, but demand curves that are often drawn as straight lines.

The entire demand curve shifts to the right or left:

When there is a change in demand

Complements

Goods, services, or resources that are used or consumed with one another.

Inferior Good

A good for which there is an inverse relationship between the demand for the good and income. For inferior goods, an increase in income decreases demand, and a decrease in income increases demand.

inferior goods

Goods for which income and demand move in the opposite directions.

A _____ is a tangible product that consumers, firms, or governments wish to purchase.

Good

A tangible product that consumers, firms, or governments wish to purchase is a:

Good

Assume you buy three goods: hamburgers, french fries, and pizza. If the price of pizza increases, the demand for:

Hamburgers and french fries increase.