Demand

Question 1

What is Effective Demand?

Answer 1

Demand supported by intention and ability to buy

Question 2

What is Latent Demand?

Answer 2

Willingness to buy but not yet ability to buy

Could be used in poverty essays

Question 3

What is Joint Demand?

Answer 3

Demand for one good is closely linked to the demand for another

When two or more goods that go well together

Ie: fish and chips

Question 4

What is Competitive Demand?

Answer 4

Two or more goods that are close substitutes for each other

Question 5

What is Derived Demand?

Answer 5

When demand for one product drives the demand for another

eg demand for factors of production driven by demand for final goods

Question 6

What is Composite Demand?

Answer 6

Good is demanded for more than one use

Question 7

What is Individual Demand?

Answer 7

A consumer’s demand for a good/service

Question 8

What is Market Demand?

Answer 8

All consumers’ demands in the market summed together.

Question 9

What is the Law of Demand?

Answer 9

As price falls, the demand increases and vice versa. Demand slopes downwards to the right

Question 10

What is Ceteris Paribus?

Answer 10

All other influencing factors are held constant

The demand & supply curve is drawn “ceteris paribus”.

Other factors affecting demand, such as income and tastes, are held constant to show how demand varies with price.

Other factors affecting supply, *such as *costs of production, are held constant to show how demand varies with price

Question 11

What are some Factors that cause a shift in Demand?

Answer 11

• Change in preferences

• Change in incomes

• Change in the price of related
goods (complements or
substitutes)

• Change in size/structure of the
population

• Changes in interest rates

• Changes in the law

• Changes in expectations