Scribd
Upload
15 views

Study Guide

Chapter 4 covers essential economic concepts related to demand, including the Law of Demand, elasticity, and the effects of price changes on consumer behavior. It explains the differences between demand and quantity demanded, as well as the impact of complementary and inferior goods. The chapter also discusses how demographic factors influence market demand and provides examples of elastic goods.

Uploaded by

plfj.2021
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
15 views

Study Guide

Chapter 4 covers essential economic concepts related to demand, including the Law of Demand, elasticity, and the effects of price changes on consumer behavior. It explains the differences between demand and quantity demanded, as well as the impact of complementary and inferior goods. The chapter also discusses how demographic factors influence market demand and provides examples of elastic goods.

Uploaded by

plfj.2021
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
You are on page 1/ 2

Chapter 4 Study Guide

Need to Know Vocab:

●​ Law of Demand
If prices go up, the quantity demanded go down and vice versa
●​ Demand
Willingness want and ability to buy something
●​ Quantity Demanded
Amount demanded at a certain price
●​ Substitution Effect
Consumers will switch to cheaper products as prices rise
●​ Compliments/Complementary Goods
Two goods that go together and are normally sold with each other
●​ Elasticity of Demand
Change in demand due to change of price
●​ Normal Goods
As income rises, demand rises for these goods (Food, Clothing, Household Appliances)
●​ Inferior Goods
Goods that are less desirable when income increases
●​ Demographics
Statistical characteristics of the population used to identify certain groups and markets.

Content:
●​ What economic concept is being used when people buy more of something when it is on sale
(i.e. the price is lower)
Law of Demand (As the price goes down, the demand goes up)
●​ What does a demand curve and demand schedule tell us? (Think of the X and Y axes)

Demand Schedule- illustrates the ability and willingness of a consumer to buy at different
prices (Quantity demanded and Price)

Demand Curve- info from the demand schedule put in a graph


●​ Be able to tell me as much as you can (shifts, coordinates, and so on) about the following graph:

D is the unchanged demand curve. D1 demand has increased while in D2 demand has
decreased. When this product is 14 dollars, 2 million of it are wanted. This chart is elastic for as
the price changes the quantity demanded rises. When the object is worth 14 dollars people
regularly want 2 million of it. However with change to the demand of this product, people may
want none at 14 dollars or want 2 million more.

●​ What makes a good inelastic? A price change will not affect the quantity demanded
●​ What makes a good elastic? A price change will immensely affect the quantity
demanded

●​ Of the following, what does the substitution and income effect influence?
○​ How income changes No
○​ How producers improve production of goods Yes
○​ What influences your buying habits Yes
○​ Market changes that impact production Yes

●​ Examples of elastic goods


Oreos, if the price is high, people will either buy substitutions or not buy at all, however when
the price drops, people will buy a lot

●​ Difference in demand vs quantity demanded

Demand - The higher the price, less people buy, the lower the price, more people buy multiple
Quantity Demand- amount demanded at a particular price

●​ From the 5 factors that influence production, be prepared to tell a time in which one of
these factors influenced the demand you had for a good or service

Population
Income
Preference
Expectations Of Consumers​
Related Goods

You might also like