ECON 200 - Review Questions #2

ECON 200 - Review Questions #2 - Antonio Alarcn ECON 200...

Info iconThis preview shows pages 1–2. Sign up to view the full content.

View Full Document Right Arrow Icon
Antonio Alarcón ECON 200 Review Questions #2 2/6/08 1. What is the law of demand? Law of demand – Price and quantity demanded are inversely or negatively related, assuming that other factors affecting the quantity demanded remain the same 2. What is the difference between a change in demand and a change in quantity demanded? Change in quantity demanded – Movement along the demand curve, which results from a change in varying demand shifters Change in demand – Shift in a demand caused by a demand shifter Demand shifter – Change in a variable that can cause a shift in a demand curve i. Examples: a. Consumer tastes i. Change in consumer taste: (Increase) - Will shift the demand curve to the right (Decrease) - Will shift the demand curve to the left b. Number of buyers i. (Increase) – Will shift the demand curve to the right (Decrease) – Will shift the demand curve to the left c. Consumer income i. Normal goods: (Increase) – Will shift demand to the right (Decrease) – Will shift demand to the left ii. Inferior goods: (Increase) – Will shift demand to the left (Decrease) – Will shift demand to the right d. Prices of related goods i. Substitute goods: (Increase) – Will shift demand to the right in another good (Decrease) – Will shift demand to the left in another good ii. Complementary goods: (Increase) – Will shift demand to the left in another good (Decrease) – Will shift demand to the right in another good e. Expected future prices i. (Increase) – Will shift demand to the right ii. (Decrease) – Will shift demand to the left 3. Explain how the law of demand shows that the everyday concept of “need” is not a very useful concept for economic analysis. The concept of a “need” for a respective individual is directly related to a following of factors:
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Image of page 2
This is the end of the preview. Sign up to access the rest of the document.

This note was uploaded on 04/03/2008 for the course ECON 200 taught by Professor Cramer during the Spring '07 term at University of Arizona- Tucson.

Page1 / 6

ECON 200 - Review Questions #2 - Antonio Alarcn ECON 200...

This preview shows document pages 1 - 2. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online