Demand: Contraction And Expansion Increase And Decrease Flashcards
(20 cards)
What is demand contraction?
Demand contraction refers to a decrease in the quantity demanded of a good or service at a given price.
What is demand expansion?
Demand expansion is an increase in the quantity demanded of a good or service at a given price.
True or False: Demand increases when consumer preferences shift towards a product.
True
Fill in the blank: A decrease in consumer income typically leads to a ________ in demand for normal goods.
decrease
What effect does an increase in the price of substitutes have on demand?
It typically increases the demand for the original good.
What is the relationship between price and quantity demanded in demand contraction?
In demand contraction, as price increases, the quantity demanded decreases.
True or False: A rise in consumer income will always lead to an increase in demand for inferior goods.
False
What is a key factor that can lead to demand increase?
A rise in consumer income or positive changes in consumer preferences.
Choose the correct term: A decrease in demand due to a rise in the price of complementary goods is called ________.
demand contraction
What happens to demand when there is a positive expectation about future income?
Demand generally increases.
What is the impact of advertising on demand?
Effective advertising can increase demand for a product.
True or False: Demand can only decrease due to changes in price.
False
What does a demand curve shift to the left indicate?
It indicates a decrease in demand.
What can cause a decrease in demand for luxury goods?
Economic downturns or decreases in consumer income.
Fill in the blank: If the price of a product decreases and leads to an increase in quantity demanded, this is called ________ along the demand curve.
movement
What is the definition of a demand increase?
A demand increase is when consumers are willing to buy more of a good or service at the same price.
What factors can lead to an increase in demand?
Increased consumer income, changes in tastes and preferences, and lower prices of substitutes.
True or False: Seasonal changes can affect demand for certain products.
True
What is the term for when demand decreases even though the price remains the same?
Demand contraction due to non-price factors.
What is the general effect of consumer expectations on future prices on current demand?
If consumers expect prices to rise in the future, current demand will increase.
