Demand Word Scramble
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| Term | Definition |
| Demand | The number of units of goods a consumer will buy at various prices. |
| Individual demand | The quantity of a good an individual consumer demands at different prices. |
| Market demand | Total quantity of a good that all consumers demand at different prices. |
| The Law of Demand: | States that as prices rise the quantity demanded will fall and vice versa, ceteris paribus (all other things being equal) |
| Consumer Surplus | The difference between what a consumer actually pays for a good and the maximum s/he was willing to pay for the good rather than do without it. |
| Derived Demand | Where a factor of production is not demanded for its own sake but rather for its contribution to the production process, e.g. timber. |
| Income effect: | When the price of a good falls it means that a consumer’s real income will rise. |
| Joint Demand | Where two (or more) goods are used in conjunction with each other in order to achieve utility. They are complementary goods, for example, golf clubs and golf balls. |
| Effective demand | Demand supported by the necessary purchasing power. |
| Composite demand: | Occurs when a commodity is required for a number of uses, e.g. sugar. |
| Normal Goods | Obey the law of demand and have a positive income effect. |
| Inferior goods: | Have a negative income effect |
| Giffen goods: | Have a positive price effect. More is bought as the price rises, and less is bought as the price falls. |
| Substitute goods | Goods that satisfy the same needs and can be considered alternatives to each other, e.g. Lyons and Barry’s tea. |
| Complementary goods | Goods that are used jointly. The use of one involves the other, e.g. cars and petrol. |
| Substitution effect | When the price of a good rises customers may shift to cheaper alternatives to maximise their utility. |
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jennymarshall
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