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Economics

Quizzes & Activities

Demand Theory (Quizlet Activity)

Level:
AS, A Level, IB
Board:
AQA, Edexcel, OCR, IB, Eduqas, WJEC

Here are some key terms in the theory of demand - test your understanding with this quizlet activity!

Some key demand theory terms to revise

  • Composite demand: Demand for a product that has more than one use e.g. demand for milk, land, straw
  • Derived demand: Where demand for a factor of production is linked to demand for another product
  • Effective demand: Demand backed by ability to pay
  • Income effect: When a fall in price increases a consumer's real purchasing power
  • Joint demand: Describes the demand for two complements e.g. smartphones and apps
  • Law of demand: Inverse relationship between price and demand
  • Off-peak demand: Periods of time when demand for consumers is below normal levels. Firms often lower the price to stimulate demand.
  • Real disposable income: Income adjusted for inflation after direct taxes
  • Seasonal demand: Demand that varies according to the time of year e.g. spending on jewellery and holidays
  • Speculative demand: Demand for financial assets where investors expect the price to rise in the future
  • Substitution effect: When a fall in price makes one product relatively cheaper to alternatives
  • Veblen Good: A good with a positively sloped demand curve. As price increases, people buy more of these goods to demonstrate their social status.

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