Lecture Series II

Demand

The willingness and abillity to purchase a good or service in a world of scarcity.

The behavioral factor

Willingness

The economic factor

The abillity to purchase

Willingness, ability

both _____________and ________ have to be present for demand to exist.

buying, consumer

Demand is relevant to the ________, meaning it has to do with the ________.

Quantity demanded def. 1

The number of people that are willing and able to purchase a good or service at a specific price

Quantity demanded def. 2

(QD) Specific number or amount of a good purchased at a particular price (number of goods and services at price X) QD is a function of price

a function of price

the amount of something someone is willing to buy is dependent on the price of the good

Law of demand

Quantity of s good demanded is inversely related to its price, law stating that as the price of a good increases, the quantity of that good demanded will decrease. Similarly, as the prices of a good decreases, the quantity of that good demanded will increase. Ceteris paribus

ceteris paribus

Latin phrase meaning essentially… “all things constant” There are exceptions as in external factors.

Inverse relationship

Relationship between two factors, which move in opposite directions. example is the law of demand.

Direct relationship

Relationship between two factors, which move in the same direction. Example is price and quantity supplied/ income and consumption.

Demand schedule

Table demonstrating the number of units of a good demanded at various points.

Demand curve

GRAPH representing the law of demand. Amount of a good consumers are willing and able to purchase a various prices.