Demand Study Guide

• What does the Law of Demand state?
• What does each along a demand curve and market demand curve represent?
• What happens to the quantity demanded of a normal good if the price of that normal good rises?
• What would increase the amount of an inferior good a person is willing to purchase?
• What does the price elasticity of demand tell us?
• What happens to demand for a normal good if the substitution effect is stronger than the income effect? For example, if hamburgers (both real and fake meat) are consumed regularly, what happens when the price of real meat rises?
• How do you determine the difference between revenue and profit?
• If Sally gets a raise and purchases less of a good, what can be assumed about that good?
• What is demand?
• The law of demand implies that what will happen to the demand curve?
• A hungry senior might be willing to pay a high price for snacks. After that senior is no longer hungry, the senior might not be willing to pay the same price. What is this an example of?
• What is the difference between complementary and substitute goods? Provide an example of each.
• Define each of the following:
  • Change in demand
  • Change in quantity demanded
  • Demand
  • Demand curve
  • Demand schedule
  • Elastic
  • Elasticity of demand
  • Inelastic
  • Law of demand
  • Market demand curve
  • Market demand schedule
  • Substitute
  • Total revenue
  • Unit elastic
• Be able to graph both a demand curve and a market demand curve, includingeverything on it that needs to be.
• What factors cause a change in demand?