1 6 pts Define the following a Demand vs Quantity Demanded b

1. (6 pts.) Define the following: a. Demand vs. Quantity Demanded: b. Derived Demand: c. Aggregate Demand: (4 pts.) On the graph (a) below, clearly show the concept of a change (shift) in demand. On graph (b) clearly show what is meant by a change in quantity demanded. 2. 0 Q. 0 lb) Change in Quantity Demanded (a) Change in Demand

Solution

Answer 1.

a) the quantity demanded of a specific good or service is the quantity of that good or service which the likely buyers are willing and able to buy at a certain value of its price, while holding all other prices and pertinent variables constant.  
While the demand for that good or service is a function which connects the quantity demanded to its price.  

i.e , demand is a function , while the quantity demanded is the value of that function at a given price.  

b) Derived demand = It is a term used in economic scrutiny that expresses the demand placed on 1 good or service due to changes in the price for some other interconnected good or service. It is a demand for some physical/impalpable thing where a market exists for both associated goods and services in question.

It can have a major impact on the derived good\'s market price.

c) Aggregate Demand = It is an economic computation of the sum of all final goods and services produced in an economy, indicated as the total amount of money bartered for those goods and services.

Because aggregate demand is measured through market values, it only portrays total output at a given price level, and does not certainly depicts standard of living/quality.