Understanding Demand and Expectations

The video tutorial explains the law of demand, highlighting how price changes affect quantity demanded. It explores the impact of related goods, such as complements and substitutes, on demand. The tutorial further examines how expectations of future prices can shift the entire demand curve. Two scenarios are discussed: one where future prices are expected to rise, leading to increased current demand, and another where future prices are expected to fall, resulting in decreased current demand.

What happens to the quantity demanded when the price of a good increases, assuming all else is equal?

• It decreases.

• It increases.

• It remains constant.

• It fluctuates randomly.

How does the price of a substitute good affect the demand for the original good?

• It has no effect.

• It decreases the demand.

• It increases the demand.

• It stabilizes the demand.

If people expect the future price of a good to rise, what is likely to happen to the current demand?

• Current demand will remain unchanged.

• Current demand will become unpredictable.

• Current demand will increase.

• Current demand will decrease.

In the context of demand, what does a shift to the right of the demand curve indicate?

• An increase in demand.

• A temporary fluctuation in demand.

• A decrease in demand.

• No change in demand.

What is a common expectation regarding the prices of consumer electronics over time?

• They will increase.

• They will decrease.

• They will remain constant.

• They will become volatile.

How does an expectation of falling future prices affect current demand?

• It increases current demand.

• It decreases current demand.

• It has no effect on current demand.

• It causes current demand to fluctuate.

What happens to the demand curve when expectations of future prices change from neutral to expecting a decrease?

• The curve shifts to the left.

• The curve becomes erratic.

• The curve shifts to the right.

• The curve remains unchanged.

What is the effect on demand if consumers expect prices to decrease even faster than before?

• Demand increases.

• Demand decreases.

• Demand remains constant.

• Demand becomes unpredictable.

What does a shift to the left of the demand curve signify?

• An increase in demand.

• A decrease in demand.

• No change in demand.

• A temporary increase in demand.

What is the overall impact of changing expectations on the demand curve?

• It stabilizes the curve.

• It causes the curve to shift right or left.

• It makes the curve unpredictable.

• It has no impact on the curve.