Chapter 4: Market economy

What does individual demand refer to?

The quantity demanded of a good or service by an individual consumer at different times.

What is market demand?

The aggregate quantity demanded by all consumers at different prices.

What is derived demand?

Demand for a good that is used in the production of another good.

What does composite demand indicate?

Goods that have more than one use, where an increase in demand for one product can result in a fall in the supply of another.

What are joint demand goods?

Complimentary goods where a rise in demand for one causes a rise in demand for the other.

What is effective demand?

Demand that is supported by necessary purchasing power, reflecting the willingness and ability of consumers to purchase goods.

What does the law of demand state?

As the price of goods and services rises, the quantity demanded will fall, and as the price falls, the quantity demanded will rise.

What are snob goods?

Luxury goods that consumers find more attractive due to their high price, which may increase demand.

What defines Giffen goods?

Necessary goods with few substitutes, where an increase in price doesn't decrease demand.

When do consumers defer purchases according to expectations?

When they anticipate a price drop usually due to an economic downturn or recession.

What causes a movement along the demand curve?

A change in price.