Factors that may shift the demand curve

Question 1

What is ‘Disposable income’?

Answer 1

It’s income that is available to someone over a period of time to spend; it includes state benefits but excludes direct taxes

Question 2

What are ‘inferior goods’?

Answer 2

Goods for which demand will fall if income rises or rise if income falls

Question 3

What are ‘normal goods’?

Answer 3

Goods for which demand will increase if income increases or fall if income falls

Question 4

What are ‘substitute goods’?

Answer 4

Goods that are bought as an alternative to another but perform the same function

Question 5

What are ‘complimentary goods’?

Answer 5

Goods that are purchased together because they are consumed together

Question 6

What is ‘demography’?

Answer 6

It’s the study of human populations and how they change

Question 7

What is ‘infrastructure’?

Answer 7

Basic systems and structures that a country needs to make economic activity possible for example, transport, communication, and power supplies

Question 8

How can advertising affect demand?

Answer 8

Advertising can increase demand for products by influencing consumer preferences and awareness, leading to a rightward shift in the demand curve.

Question 9

How does income affect demand?

Answer 9

An increase in disposable income generally leads to increased demand for most goods, except for inferior goods, which experience a decrease in demand.

Question 10

What factors can cause a shift in the demand curve?

Answer 10

Factors such as:

• changes in income
• advertising
• prices of substitutes and complements
• fashion
• demography

Question 11

Describe the difference between a movement along the demand curve and a shift in the demand curve.

Answer 11

• A movement along the demand curve is caused by a change in the price of the good
• a shift in the demand curve is caused by factors other than price, such as income or advertising.