Demand

Demand means being willing and able to buy. Wanting a product without the means to buy it is not the same as market demand.

Lesson 2 of 33 parts Practice Flashcards

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Demand and Quantity demanded

Objective: Explain demand and quantity demanded, distinguish their meanings, and apply them to a described case.

Demand: Demand relates possible prices to quantities buyers are willing and able to purchase. Quantity demanded: Quantity demanded is the planned purchase amount at one price and time. Supply and demand describe plans at alternative prices within a specified market and period. A movement along a curve differs from a shift of that curve. Equilibrium predictions require a description of what changed and what remained fixed. If several conditions change together, one outcome may be indeterminate without more information. Actual adjustment can be affected by contracts, institutions, information, and time. Application: A schedule lists intended purchases at different prices. This most directly illustrates demand. Buyers seek twenty units at the stated price. This most directly illustrates quantity demanded.

Worked examples

Try itOriginal teaching scenario: A schedule lists intended purchases at different prices. Which idea from this section does it most directly illustrate?Show answer

Step 1 — Read the observation: A schedule lists intended purchases at different prices. Step 2 — Recall the relevant idea: Demand relates possible prices to quantities buyers are willing and able to purchase. Step 3 — Connect the observation to the idea: The scenario is an illustration of demand. Step 4 — Check the limit: This short scenario illustrates the concept; it does not establish every detail or exclude every other influence in a real situation.

Try itOriginal teaching scenario: Buyers seek twenty units at the stated price. Which idea from this section does it most directly illustrate?Show answer

Step 1 — Read the observation: Buyers seek twenty units at the stated price. Step 2 — Recall the relevant idea: Quantity demanded is the planned purchase amount at one price and time. Step 3 — Connect the observation to the idea: The scenario is an illustration of quantity demanded. Step 4 — Check the limit: This short scenario illustrates the concept; it does not establish every detail or exclude every other influence in a real situation.

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Demand and Quantity demanded

Objective: Explain demand and quantity demanded, distinguish their meanings, and apply them to a described case.

Worked examples

Try itOriginal teaching scenario: A schedule lists intended purchases at different prices. Which idea from this section does it most directly illustrate?Show answer

Try itOriginal teaching scenario: Buyers seek twenty units at the stated price. Which idea from this section does it most directly illustrate?Show answer

Law of demand and Substitute

Objective: Explain law of demand and substitute, distinguish their meanings, and apply them to a described case.

Law of demand: Other things equal, a higher price usually lowers quantity demanded in the introductory model. Substitute: A substitute can serve a similar purpose in consumption. Supply and demand describe plans at alternative prices within a specified market and period. A movement along a curve differs from a shift of that curve. Equilibrium predictions require a description of what changed and what remained fixed. If several conditions change together, one outcome may be indeterminate without more information. Actual adjustment can be affected by contracts, institutions, information, and time. Application: A price increase reduces planned purchases with income unchanged. This most directly illustrates law of demand. Some riders switch from a train to a bus. This most directly illustrates substitute.

Worked examples

Try itOriginal teaching scenario: A price increase reduces planned purchases with income unchanged. Which idea from this section does it most directly illustrate?Show answer

Step 1 — Read the observation: A price increase reduces planned purchases with income unchanged. Step 2 — Recall the relevant idea: Other things equal, a higher price usually lowers quantity demanded in the introductory model. Step 3 — Connect the observation to the idea: The scenario is an illustration of law of demand. Step 4 — Check the limit: This short scenario illustrates the concept; it does not establish every detail or exclude every other influence in a real situation.

Try itOriginal teaching scenario: Some riders switch from a train to a bus. Which idea from this section does it most directly illustrate?Show answer

Step 1 — Read the observation: Some riders switch from a train to a bus. Step 2 — Recall the relevant idea: A substitute can serve a similar purpose in consumption. Step 3 — Connect the observation to the idea: The scenario is an illustration of substitute. Step 4 — Check the limit: This short scenario illustrates the concept; it does not establish every detail or exclude every other influence in a real situation.

Complement and Demand shift

Objective: Explain complement and demand shift, distinguish their meanings, and apply them to a described case.

Complement: A complement is a product commonly used together with another. Demand shift: A demand shift changes planned quantities at given prices. Supply and demand describe plans at alternative prices within a specified market and period. A movement along a curve differs from a shift of that curve. Equilibrium predictions require a description of what changed and what remained fixed. If several conditions change together, one outcome may be indeterminate without more information. Actual adjustment can be affected by contracts, institutions, information, and time. Application: Demand for printer ink relates to use of printers. This most directly illustrates complement. A preference change raises purchases at each price. This most directly illustrates demand shift.

Worked examples

Try itOriginal teaching scenario: Demand for printer ink relates to use of printers. Which idea from this section does it most directly illustrate?Show answer

Step 1 — Read the observation: Demand for printer ink relates to use of printers. Step 2 — Recall the relevant idea: A complement is a product commonly used together with another. Step 3 — Connect the observation to the idea: The scenario is an illustration of complement. Step 4 — Check the limit: This short scenario illustrates the concept; it does not establish every detail or exclude every other influence in a real situation.

Try itOriginal teaching scenario: A preference change raises purchases at each price. Which idea from this section does it most directly illustrate?Show answer

Step 1 — Read the observation: A preference change raises purchases at each price. Step 2 — Recall the relevant idea: A demand shift changes planned quantities at given prices. Step 3 — Connect the observation to the idea: The scenario is an illustration of demand shift. Step 4 — Check the limit: This short scenario illustrates the concept; it does not establish every detail or exclude every other influence in a real situation.

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