Understanding Demand
The extra usefulness or additional satisfaction a person gets from acquiring or using one more unit of a product
what is marginal utility?
What is being changed when you have a movement ALONG the demand curve?
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?
Think of trends
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 your 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 the only thing that causes movement along the curve?
Price
Inelastic demand means that consumer are ----- to price changes
NOT responsive
Gasoline from QT is it Elastic or Inelastic?
Elastic
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
My soon to be ex-brother in laws' insulin, is it elastic or Inelastic?
Inelastic
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 a car elastic or inelastic
Both
What are the 6 factors that affect change in Demand? Causes it to shift right or left
1. Consumer Income
2. Consumer Taste
3. Substitutes
4. Complements
5. Expectations
6. Number of Consumers