WAEC Economics Past Questions & Answers - Page 60

In economics, effective demand (ED) in a market is the demand for a product or service which occurs when purchasers are constrained in a different market. it is the Quantity of a good or service that consumers are actually buying at the current market price. 

A shift towards the right in the supply curve indicates that there is an increase in the quantity supplied at the existing price.

When the demand curve is parallel to the vertical axis, it means, that the same amount of goods are demanded at any price level. Which further means that there is no effect of change in price on the quantity demanded. Hence, the product is perfectly Inelastic and quantitatively, elasticity of demand is 0.

Want is the desire to have something or to buy a product. Demands on the other hand are requests for specific products that the buyer is willing to and able to pay for.

So, the key difference between wants and demand is the ability of the consumer to pay for the product. In other words, if a customer is willing and able to buy a product, that is demand while wishing to buy a product is simply a want.

A positive cross-price elasticity value indicates that the two goods are substitutes.

Two goods that complement each other have a negative cross elasticity of demand: as the price of good Y rises, the demand for good X falls.