1.5 Demand

• Consumers must have sufficient income to afford a good or service for demand to exist.


  True
• Demand is measured over a specific time period, such as per month or per year.


  True
• What are the main factors that affect demand?

  Price, income, tastes, related goods, expectations
• What happens to the demand for coffee if the price of tea increases?

  Demand for coffee rises
• An increase in consumer income raises demand for normal goods.
• Anticipation of future price increases can boost current demand.

  True
• Individual demand refers to the demand of a single consumer.
• The Law of Demand states that there is a direct relationship between price and quantity demanded.

  False
• Increased consumer income reduces demand for inferior goods.


  True
• As price increases, the quantity demanded decreases
• If the price of Pepsi rises, demand for Coca-Cola is likely to increase
• Match the term with its description:

  Market Demand ↔️ Total quantity consumers are willing and able to purchase

  Individual Demand ↔️ Demand of a single consumer
• Market demand is the aggregated demand of all consumers
• A change in demand results in a shift of the entire demand curve
• One key component of demand is that consumers must have the willingness
• Match the component of demand with its description:

  Willingness ↔️ Consumers must want to purchase the good or service.

  Ability ↔️ Consumers must have sufficient income.

  Price levels ↔️ Quantity demanded changes based on price.

  Time period ↔️ Demand is measured over a specific timeframe.
• The Law of Demand states that as the price of a good increases, the quantity demanded decreases
• An increase in consumer income raises demand for normal goods and lowers demand for inferior goods.
• If the price of pizza rises from $10 to $20, consumers will purchase fewer pizzas.
• If the price of tea increases, the demand for coffee rises.
• If the population of a town increases and consumers develop a preference for local bread, demand for bread will rise.


  True
• Consumers must have the willingness to purchase a good, which means they must have a desire for it.
• As the price of coffee increases from $3.00 to $5.00 per cup, consumers tend to buy less coffee.
• If the price of Pepsi rises, the demand for Coca-Cola is likely to increase.

  True
• What directly affects consumer demand?

  Consumer tastes
• Anticipated price increases or shortages can boost current demand
• What is the key difference between individual and market demand?

  Scale of consumers
• What is the primary cause of a change in demand?

  Non-price factors
• What does demand measure?

  Quantity consumers are willing and able to purchase
• What are the key components of demand?

  Willingness, ability, price, time period
• What is the Law of Demand?

  Inverse relationship between price and quantity demanded
• Higher prices reduce demand, while lower prices increase demand.


  True
• The quantity demanded decreases as the price increases
• Changes in consumer tastes directly affect demand.


  True
• Match the component of market demand with its description:

  Consumer Preferences ↔️ Determines what consumers want to buy.

  Purchasing Power ↔️ Affects consumers' ability to buy.

  Population Size ↔️ More consumers increase overall demand.
• Market demand is the aggregated demand of all consumers in a market.

  True
• The Law of Demand describes an inverse relationship between price and quantity demanded.
• If the price of iPhones increases, fewer people will buy them.
• Increased consumer income reduces demand for inferior goods.

  True
• When car prices increase, the demand for gasoline decreases.

  True