ECO 201 - Exam #2 Study Guide
Questions and Answers 100% Pass
(1) Demand - ✔✔the quantity of a product that people are *willing* and *able* to buy
during a specific period
(2) Law of Demand - ✔✔the *quantity* of a product *inversely* related to the *price* of
the product, other things held constant
(2) 'Other Things Held Constant ' - ✔✔- indicates the effect of one economic variable on
another, holding constant all other variables that may affect the second variable.
-the dominant relationship is between quantity and demand, but there are other factors
that go into quantity, which is ignored for now.
(3) Shift factors of Demand - ✔✔-the consumers taste and preferences
~the income of the customer
-number of buyers
~prices of related goods
-consumer expectations
-taxes and substitutes
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, (4) Substitute Goods - ✔✔-Goods that are perceived as similar or comparable
-When the *price of one* and the *demand for the other* move in the *same direction*
(ex. tea and coffee)
(4) Complementary Goods - ✔✔-Goods that generate satisfaction when *consumed
together*
-The *price of one* and the *demand of the other* move in the *opposite direction*
(5) Movement Along the Demand Curve - ✔✔This will indicate a *change in price of a
product* (different at different prices)
(5) Shift of the Demand Curve - ✔✔this will indicate a change in one or more of the
*determinants (shift factors) of demand*
(6) Quantity Demanded - ✔✔This refers to *a point on the demand curve*. Each point
has a different price quantity combination.
(6) Demand (Demand Curve) - ✔✔This refers to the entire demand for a product
(7) When price decreases, why will the market increase? - ✔✔-*new customers* will
demand the product
- customers who are already buying will *buy more*
Market Demand - ✔✔the horizontal summation of individual buyers
EMILY CHARLENE © 2025, ALL RIGHTS RESERVED 2
Questions and Answers 100% Pass
(1) Demand - ✔✔the quantity of a product that people are *willing* and *able* to buy
during a specific period
(2) Law of Demand - ✔✔the *quantity* of a product *inversely* related to the *price* of
the product, other things held constant
(2) 'Other Things Held Constant ' - ✔✔- indicates the effect of one economic variable on
another, holding constant all other variables that may affect the second variable.
-the dominant relationship is between quantity and demand, but there are other factors
that go into quantity, which is ignored for now.
(3) Shift factors of Demand - ✔✔-the consumers taste and preferences
~the income of the customer
-number of buyers
~prices of related goods
-consumer expectations
-taxes and substitutes
EMILY CHARLENE © 2025, ALL RIGHTS RESERVED 1
, (4) Substitute Goods - ✔✔-Goods that are perceived as similar or comparable
-When the *price of one* and the *demand for the other* move in the *same direction*
(ex. tea and coffee)
(4) Complementary Goods - ✔✔-Goods that generate satisfaction when *consumed
together*
-The *price of one* and the *demand of the other* move in the *opposite direction*
(5) Movement Along the Demand Curve - ✔✔This will indicate a *change in price of a
product* (different at different prices)
(5) Shift of the Demand Curve - ✔✔this will indicate a change in one or more of the
*determinants (shift factors) of demand*
(6) Quantity Demanded - ✔✔This refers to *a point on the demand curve*. Each point
has a different price quantity combination.
(6) Demand (Demand Curve) - ✔✔This refers to the entire demand for a product
(7) When price decreases, why will the market increase? - ✔✔-*new customers* will
demand the product
- customers who are already buying will *buy more*
Market Demand - ✔✔the horizontal summation of individual buyers
EMILY CHARLENE © 2025, ALL RIGHTS RESERVED 2
