2.3

Demand

Cambridge IGCSE Economics (0455)  · Unit 2: The allocation of resources  · 9 flashcards

Demand is topic 2.3 in the Cambridge IGCSE Economics (0455) syllabus , positioned in Unit 2 — The allocation of resources , alongside Microeconomics and macroeconomics, The role of markets and Supply.  In one line: Demand refers to the quantity of a good or service that consumers are willing and able to purchase at a given price and time. It reflects both the desire and ability to pay.

This topic is examined in Paper 1 (multiple-choice) and Paper 2 (structured questions, including data-response items).

The deck below contains 9 flashcards — 4 definitions, 2 key concepts and 3 application cards — covering the precise wording mark schemes reward.  Use the 4 definition cards to lock down command-word answers (define, state), then move on to the concept and application cards to handle explain, describe and compare questions.

Key definition

'demand' in economics

Demand refers to the quantity of a good or service that consumers are willing and able to purchase at a given price and time. It reflects both the desire and ability to pay.

Example: if the price of movie tickets falls from $15 to $10, consumers may demand more tickets, increasing the quantity demanded.

Questions this Demand deck will help you answer

Definition Flip

Define 'demand' in economics.

Answer Flip

Demand refers to the quantity of a good or service that consumers are willing and able to purchase at a given price and time. It reflects both the desire and ability to pay.

Example: if the price of movie tickets falls from $15 to $10, consumers may demand more tickets, increasing the quantity demanded.
Key Concept Flip

Explain the 'law of demand'.

Answer Flip

The law of demand states that as the price of a good or service increases, the quantity demanded decreases, and vice versa, ceteris paribus. This inverse relationship is depicted by a downward-sloping demand curve.

Example: if the price of oranges rises from $1 to $2 per orange, consumers may buy fewer oranges, switching to cheaper fruits.
Key Concept Flip

What is the difference between a 'movement along' and a 'shift' of the demand curve?

Answer Flip

A 'movement along' the demand curve occurs when the price of the good itself changes, affecting quantity demanded.

Example: a rise in the price of candy bars from $1 to $1.50 might decrease the quantity demanded. A 'shift' occurs when other determinants of demand change, such as consumer income or tastes, causing the entire curve to move.
Key Concept Flip

Explain how an increase in consumer income typically affects the demand for a normal good.

Answer Flip

For a normal good, an increase in consumer income leads to an increase in demand, shifting the demand curve to the right. Consumers have more disposable income.

Example: if consumer incomes rise by 10%, demand for new cars (a normal good) may increase by 5%, all else being equal.
Definition Flip

Define 'substitute goods' and give an example.

Answer Flip

Substitute goods are goods that can be used in place of each other to satisfy the same need or want.

Example: if the price of Coca-Cola increases significantly, consumers may switch to Pepsi, leading to an increase in demand for Pepsi. This demonstrates how the demand for one good is directly related to the price of its substitute.
Definition Flip

Define 'complementary goods' and give an example.

Answer Flip

Complementary goods are goods that are often consumed together.

Example: cars and gasoline are complements; if the price of gasoline increases, the demand for cars may decrease.
Key Concept Flip

How does a change in consumer tastes or preferences affect the demand curve?

Answer Flip

A favorable change in consumer tastes or preferences towards a good will increase demand, shifting the demand curve to the right. Conversely, an unfavorable change will decrease demand, shifting the curve to the left.

Key Concept Flip

Explain how an increase in population size may affect the market demand for housing.

Answer Flip

An increase in population size typically leads to a higher demand for housing, shifting the demand curve to the right. This is because more individuals require accommodation.

Example: rapid population growth in a city like Lagos, Nigeria, has significantly increased the demand for housing, driving up prices and prompting construction of new residential areas.
Definition Flip

What is 'quantity demanded'?

Answer Flip

Quantity demanded refers to the specific amount of a good or service that consumers are willing and able to purchase at a specific price during a specific time period. It is a point on the demand curve.

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Take Economics Quiz
2.2 The role of markets 2.4 Supply

Key Questions: Demand

Define 'demand' in economics.

Demand refers to the quantity of a good or service that consumers are willing and able to purchase at a given price and time. It reflects both the desire and ability to pay.

Example: if the price of movie tickets falls from $15 to $10, consumers may demand more tickets, increasing the quantity demanded.
Define 'substitute goods' and give an example.

Substitute goods are goods that can be used in place of each other to satisfy the same need or want.

Example: if the price of Coca-Cola increases significantly, consumers may switch to Pepsi, leading to an increase in demand for Pepsi. This demonstrates how the demand for one good is directly related to the price of its substitute.
Define 'complementary goods' and give an example.

Complementary goods are goods that are often consumed together.

Example: cars and gasoline are complements; if the price of gasoline increases, the demand for cars may decrease.
What is 'quantity demanded'?

Quantity demanded refers to the specific amount of a good or service that consumers are willing and able to purchase at a specific price during a specific time period. It is a point on the demand curve.

More topics in Unit 2 — The allocation of resources

Demand sits alongside these Economics decks in the same syllabus unit. Each uses the same spaced-repetition system, so progress in one informs the next.

2.1 Microeconomics and macroeconomics

9 flashcards
2.2 The role of markets

8 flashcards
2.4 Supply

9 flashcards
2.5 Price determination

9 flashcards
2.6 Price elasticity of demand

10 flashcards
2.7 Price elasticity of supply

9 flashcards
2.8 Market economic system

9 flashcards
2.9 Market failure

9 flashcards
2.10 Mixed economic system

10 flashcards

Cambridge syllabus keywords to use in your answers

These are the official Cambridge 0455 terms tagged to this section. Mark schemes credit responses that use the exact term — weave them into your answers verbatim rather than paraphrasing.

demand demand curve law of demand quantity demanded shift movement determinants income substitute complement taste population

Key terms covered in this Demand deck

Every term below is defined in the flashcards above. Use the list as a quick recall test before your exam — if you can't define one of these in your own words, flip back to that card.

'demand' in economics
'substitute goods' and give an example
'complementary goods' and give an example
'quantity demanded'

How to study this Demand deck

Start in Study Mode, attempt each card before flipping, then rate Hard, Okay or Easy. Cards you rate Hard come back within a day; cards you rate Easy push out to weeks. Your progress is saved in your browser, so come back daily for 5–10 minute reviews until every card reads Mastered.