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Economics Demand - 10 questions

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What is the income effect?

Change of consumption based on income.

What is substitution effect?

An decrease in sales for a product that can be attributed to consumers switching to cheaper alternatives when the price of the product rises

What are the 5 major factors for a shift in the supply curve?

1. Income 2. Trends 3. Price 4. Expectations of the product or service 5. Population size

What is ceteris paribus?

All other things will stay the same or stay equal

What causes an shift to the right in the demand curve?

An increase in demand, such as an promotion on an product

What causes an shift to the left in the demand curve?

An decrease in demand, such as an substitute good has become very cheap all of a sudden. Therefor people will substitute one product for the other product

What happens when there is an upwards movement along the demand curve?

There is less demand. Could be caused by restaurant closing at 5. After 5 there will be less demand for restaurants

To which side will the curve shift when your product is on sale?

It will most likely shift to the right, because there will be more demand for this product

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Summary economics - demand

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Law of Demand,ceteris paribus, demand curve, income effect, substitution efffect.

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