ECON 1050 Chapter 3: Economics-1 (1) (dragged) 1

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17 Sep 2016

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A demand curve is also a willingness-and-ability-to-pay curve. The smaller the quantity available, the higher is the price that someone is willing to pay for another unit. When some influences on buying plans other than the price of the good changes, there is a change in demand for that good. The quantity of the good that people plan to buy changes at each and every price, so there is a new demand curve. When demand decreases, the demand curve shifts leftward. Six main factors that change demand are: the price of related goods, expected future prices. 3: expected future income and credit, population, preferences. A substitute is a good that can be used in place of another good. A complement is a good that is used in conjunction with another good. When the price of a substitute for an energy bar rises or when the price of a complement of an energy bar falls, the demand for energy bars increases.

Related Questions

Which of the following is true?

a. The demand curve for a good shift leftward when the price of a substitute rises.
b. If consumers expect the price of a good will rise in the future, the demand curve shifts leftward.
c. An increase in population shifts the demand curve for most goods leftward.
d. For an inferior good, when income increases, the demand curve shifts leftward.

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The market demand curve

a. slopes upward.

b. is found by vertically adding the individual demand curves.

c. represents the sum of the quantities demanded by all the buyers at each price of the good.

d. represents the sum of the prices that all the buyers are willing to pay for a given quantity of the good.

When we move along a given demand curve,

all nonprice determinants of demand are held constant.

only price is held constant.

all determinants of quantity demanded are held constant.

d. income and price are held constant.

When the price of a good or service changes,

	a.	there is a movement along a given demand curve.
	b.	the demand curve shifts in the opposite direction.
	c.	the supply curve shifts in the opposite direction.
	d.	the demand curve shifts in the same direction.

When quantity demanded decreases in response to a change in price,

A. the demand curve shifts to the right.
B. the demand curve shifts to the left.
C. there is a movement down along the demand curve.
D. there is a movement up along the demand curve.
E. the supply curve shifts to the right.

The price elasticity of demand is the measure of the responsiveness of the demand for a good to a percentage change in the price of that same good. When the demand for a good changes due to an increase or decrease in the price of the good, it can be said that the good has a price elastic demand. On the other hand, a good whose demand is not significantly affected by a change in the price levels is price inelastic. For example, luxury goods are usually price elastic because these are not something that most people really need. Thus, when the price of luxury goods increases, the demand for such goods falls. Goods that fall within the latter category are usually the basic necessities such as food and prescription medicine. Even when these types of goods become pricier, most people would find ways to afford them because they need those items to survive.

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ECON 1050 Chapter 3: Economics-1 (1) (dragged) 1

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