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Read, understand, and identify key terms

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Read the following excerpt from McTaggart, D., Findlay, C and Parkin, M. Macroeconomics. Addison-Wesley Publishing Company, Sydney. 1992. Page 66.

Demand

The quantity demanded of a good or service is the amount that consumers plan to buy in a given period of time. Demands are different from wants. Wants are the unlimited desires or wishes that people have from goods or services. How many times have you thought that you would like something 'if only you could afford it' or 'if it weren't so expensive'? Scarcity guarantees that many - perhaps most - of our wants will never be satisfied. Demand reflects a decision about which wants to satisfy. If you demand something, then you've made a plan to buy it.

The quantity demanded is measured as an amount per unit of time. For example, suppose a person consumes one cup of coffee a day. The quantity of coffee demanded by that person can be expressed as one cup per day or seven cups per week or 365 cups per year. Without a time, dimension, we cannot tell whether a particular quantity demanded is large or small.

If you were trying to understand "demand" and take notes on it, your next step would be to identify the key terms about demand in the above excerpt.

Identifying the key terms assists your understanding. You can't separate the important from the less important information if it is only a mass of words for you.

1. Can you identify the key terms about demand?

Your key terms

Check your answer

Another way to understand a concept or economics principle is to try to group key information in note form.

Did you identify these key terms?:

Key terms
Quantity demanded: Amount consumers plan to buy, over given time period.
Demands: Different from wants, which are unlimited desires for goods/services.
Quantity wanted:

Not necessarily quantity actually bought.

Quantity bought and sold called quantity traded.

If quantity demanded more than amount of goods available, then quantity traded is less than quantity demanded.


Diagramming the concept

Diagramming is another way to consolidate your understanding of the concept. It helps you to see how the key ideas in the concept are related.

2. Using the key words from Task 1(above), see if you can fill in the detail on the diagram below.

Demand

  • Goods/services consumers to buy
  • Different from unlimited desires
  • Because of , most wants not satisfied.
  • Therefore, demand involves decisions of what to satisfy.

Check your answer

Demand

  • Goods/services consumers plan to buy.
  • Different from wants, unlimited desires
  • Because of scarcity, most wants not satisfied.
  • Therefore, demand involves decisions of what to satisfy.

Write in your own words

When using an economics concept in your written work, it is important to be able to write it in your own words (or paraphrase it). This demonstrates to your examiner that you understand the concept.

You can use the keywords and their relationship from your notes or diagram as the basis for your paraphrase.

3. Using the framework above, type in below an explanation of 'demand' in your own words.

Check your answer

Does your paraphrase look something like this?

Demand is concerned with the goods and services that consumers plan to buy in a given period. It is different from wants, which are unlimited desires. Because of scarcity of goods or services, most wants are not satisfied. Thus, demand involves decisions of what to satisfy.

An important note!

Remember: You must always reference through the footnote or the Harvard in text method whenever you use material from texts and other sources. If you take the words directly, you need to indicate this by using quotation marks. When you write the idea from a text in your own words, you still need to reference it. The Bibliography at the end of your assignment is where you record full details about the sources that you have used in your assignment.

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