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The demand will lower down and so will your paycheck.
If consumer income increases then they have more available income to spend. Therefore production increases to meet demand which means more jobs.
In order for consumers to earn more money, they have to make more money so this has a knock on effect with inflation as creating products cost more due to increasing labour costs. These increases are put on to the cost of the item, which makes them more expensive, so, to purchase these items the consumer needs to ear more. This can cause an inflation spiral, which governments attempt to control through grants and taxation.
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∙ 11y ago
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A Consumer's demand curve for a product is downsloping because?
As a consumer with a finite amount of resources there is a point where the product will become unattainable after it reaches a certain price. Price goes us, demand goes down, therefore the demand curve is downsloping in relationship to the increasing price.
The principles that states that the consumer will buy less as the price increases?
supply and demand/ it states that as the price of a good or service goes down the more demand will increase and as the price goes up demand decreases
What will happen if the demand curve goes up?
it means that the price is higher and demand of products is high
When income increases the demand for this type of good increases inferior?
An example would be the car industry. When the income of consumers increases as a whole, the demand for cheap cars goes down and the demand for more expensive cars goes up. When that happens, cheap cars are considered inferior goods.
What is effective demand?
Effective Demand is "the demand in which the consumer are able and willing to purchase at conceivable price" simply saying if the product price is low more will buy if the rates went high the quantity of the demand goes down
How can consumer tastes and preferences influence demand?
consumer buying increases demand when the supply begins to drop the demand goes up.
A Consumer's demand curve for a product is downsloping because?
As a consumer with a finite amount of resources there is a point where the product will become unattainable after it reaches a certain price. Price goes us, demand goes down, therefore the demand curve is downsloping in relationship to the increasing price.
The principles that states that the consumer will buy less as the price increases?
supply and demand/ it states that as the price of a good or service goes down the more demand will increase and as the price goes up demand decreases
What will happen if the demand curve goes up?
it means that the price is higher and demand of products is high
When income increases the demand for this type of good increases inferior?
An example would be the car industry. When the income of consumers increases as a whole, the demand for cheap cars goes down and the demand for more expensive cars goes up. When that happens, cheap cars are considered inferior goods.
What is effective demand?
Effective Demand is "the demand in which the consumer are able and willing to purchase at conceivable price" simply saying if the product price is low more will buy if the rates went high the quantity of the demand goes down
What happen to the energy as it goes from the producer down to the fourth level consumer?
it gets weaker
How is it possible for many elasticities to be associated with a single demand curve?
This is possible because demand is a function of many many factors. The biggest ones are price and wealth (also known as income). If an agent's income goes up, their demand for any given good will also good up. If the price goes up, an agent's demand will go down. Thus you have the price and income elasticity of demand. In a market with two goods, if agents divide their income amongst goods (for instance apples and oranges), you could easily derive a cross-price elasticity of demand that measures how much the price/demand of one good changes when the other good changes.
What information is embodied in budget line?
i think it represent the extent a consumer can his income provided he/she doesn, 't goes beyond the line
What is Keyne's psychological law of consumption and empirical evidence?
the psychological law of consumption states that as the income of the consumer goes on increaing the consumotion also increases but at a rate which is lessthan incrase in income
What happens when price goes up in elasticity of demand?
demand goes down
What is the Difference between a movement along the demand curve and change in demand itself?
A movement along the demand curve is caused by a change in the products price. Thus, the quantity demanded at each price level is not different, but the price of the product is higher and thus less people are willing to buy it.A change in demand itself is caused by a change in one of the determinants of demand. Thus, the quantity demanded at each price level is actually different. For example, if average income changes and people are generally making more money, they will be more willing to buy a given good. This means that a larger number of people will be willing to buy the good at the set price level, thereby changing the actual demand curve.The determinants of demand include:-A change in average income: as income goes up, people generally tend to buy more of a good, unless it is an inferior good which means that they will actually buy less (ex: second-hand clothing)-A change in the price of other products, usually substitutes or complements. (ex: if the price of jam goes down, people will buy more bread)-A change in consumer taste; advertising quality, health-scares, perception in the media. (ex: with the recent increase of awareness regarding global warming, people have bought more energy-efficient light bulbs)-A change in the distribution of income (depending on which consumer's income changes, the demand for a good can change) ex: If the average income of farmers goes up, they may invest in more farm machinery such as tractors. However, if the average income of doctors goes up, the demand for tractors would not change.-A change in population size and structure (ex: if a large proportion of the population moves from rural areas into the city, certain goods' demand will rise, and others will fall.)-A change in expectations for the future (ex: If people expect much inflation in the future, they may rush to buy a certain good "now" while the price is still low)-Seasonal demand (ex: the demand for ice-cream is much higher in the summer than it is in the winter)*If any of the above determinants change, the actual demand for a specific good may also change.
