ECON 101 Lecture Notes - Lecture 3: Normal Good, Inferior Good, Complementary Good

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18 Nov 2020

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Market: specific group of individuals who would potentially trade with each other. Market demand schedule: represents the sum of the quantities demanded by all individuals in the market at various prices. Market demand curve: horizontal sum of individual demand curves in that market. Movement along the demand curve occurs as a result in a change in the price of the good. Fall in price = right and downward movement along the demand curve. Rise in price = left and upward movement along the demand curve. Shift in demand: occur when the other factor that was held constant change. Normal good: an increase in income would result in an increase of the good at any given price. Inferior good: demand decreases as income increases. Changes in the price of related goods or services. Demand will increase when the price of the substitutes increases. Demand will decrease when the price of complementary good decreases. Supply for the firm and for the market.

Related Questions

The market demand curve

a. slopes upward.

b. is found by vertically adding the individual demand curves.

c. represents the sum of the quantities demanded by all the buyers at each price of the good.

d. represents the sum of the prices that all the buyers are willing to pay for a given quantity of the good.

When we move along a given demand curve,

all nonprice determinants of demand are held constant.

only price is held constant.

all determinants of quantity demanded are held constant.

d. income and price are held constant.

When the price of a good or service changes,

	a.	there is a movement along a given demand curve.
	b.	the demand curve shifts in the opposite direction.
	c.	the supply curve shifts in the opposite direction.
	d.	the demand curve shifts in the same direction.

Which of the following statements is false about the demand curve?

A)When demand decreases, there is a drop in the quantity demanded at each price.

B)When only the price of a good changes, there is movement along the demand curve but no change in demand.

C) A change in demand is graphically shown by shifting the entire demand curve.

D) An increase in demand shifts the demand curve to the left, closer to the price axis.

crimsonreindeer712

Which of the following statements is FALSE about the demand curve?

A) An increase in demand shifts the demand curve to the left, closer to the price axis.

B) When demand decreases, there is a drop in the quantity demanded at each price.

C) When only the price of a good changes, there is movement along the demand curve but no change in demand.

D) A change in demand is graphically shown by shifting the entire demand curve.

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ECON 101 Lecture Notes - Lecture 3: Normal Good, Inferior Good, Complementary Good

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