Unit 2.1 - Demand
What you need to know and understand:
Key concepts:
Concepts to understand:
- The law of demand—relationship between price and quantity demanded
- Assumptions underlying the law of demand [HL only]
- The income and substitution effects
- The law of diminishing marginal utility
- Assumptions underlying the law of demand [HL only]
- Demand curve
- Relationship between an individual consumer’s demand and market demand
- Non-price determinants of demand
- Income
- Tastes and preferences
- Future price expectations
- Price of related goods (in the cases of substitutes and complements)
- Number of consumers
- Movements along the demand curve and shifts of the demand curve
Key concepts:
- Scarcity
- Choice
- Efficiency
- Equity
- Economic well-being
- Sustainability
- Change
- Interdependence
- Intervention
Concepts to understand:
- Interaction between consumers and producers in a market is the main mechanism through which resources are directed to meet the needs and wants in an economy..
- Consumer and producer choices are the outcome of complex decision-making.
- Welfare is maximized if allocative efficiency is achieved.
- Constant change produces dynamic markets.
TEXTBOOK unit 2.1
|
|
|
|