Understanding Demand
Definition: the ------- to own something and the -----to own it
the desire to own something and the ability to own it
What is it called when we expect an item to go on sale soon?
Consumer Expectations
What is the difference between elastic and inelastic
Inelastic is a need you will be buy regardless of price
Elastic is a luxury you will be less if the price goes up
Is a trip to New York elastic or inelastic
Elastic
How do consumer preferences impact demand?
Some goods become popular (increasing demand), while other goods may lose popularity or “go out of style” (decreasing demand)
When a good's price is lower, we buy ---- of it
More of it
Normal good, when ones income increases they want ---- of these
More of these
Raising the price on an elastic good would ---- total revenue
Decrease
Is an EpiPen elastic or inelastic
Inelastic
What are complement goods?
Goods that are bought and used together
Income effect: if you income doesn't change will you buy items if the price increases
No if the prices go up our income can only afford so much
What is an inferior good?
Something people demand less of when their income increases
Inelastic demand means that consumer are ----- to price changes
NOT responsive
Are nike shoes elastic or inelastic
Both elastic or inelastic
Can demographics effect demand?
Yes!
What kind of relationship is the Law of Demand
Inverse Relationship
A rightward shift in the demand curve is....
an increase in demand
Can inelastic items be substituted
NO
Is a car elastic or inelastic
Both
Difference in Necessities and Luxury
Necessities something you need to survive
Luxury something to make your life easier
What is the substitution effect
Buy similar items at a lower cost
A leftward shift in the demand curve is...
Decrease in demand
If the prices on a inelastic good are raised what will happen to total revenue
Total revenue will increase
Is Ms. K's inhaler elastic or inelastic
Inelastic I need it to breathe
Consumer need ----- to ---- to price
Consumers need time to adjust to price