GCSE Economics Revision: Law of demand (With Mock Questions!)
Hello, Economics Superstars! 👋
Ready to ace your GCSE Economics exam? Today, we’re diving into the Law of Demand, a super important topic that can really boost your understanding (and your grades)! 💡 Let’s break it down in a way that’s simple, fun, and totally doable. We’ve even got some mock questions at the end to test your skills! Let’s go! 🚀
What is the Law of Demand?
The Law of Demand is all about understanding how the price of a good or service affects how much people want to buy it. Simply put, it says that when prices go up, the quantity demanded goes down, and when prices go down, the quantity demanded goes up. Sounds straightforward, right? 📉
But remember, this "law" assumes that everything else (like income, tastes, and prices of other goods) stays the same. This is what economists call ceteris paribus—fancy Latin for “all other things being equal.”
Key Learning Items 🧠
👉 Demand Curve: A downward-sloping line on a graph that shows the relationship between price and quantity demanded.
👉 Substitution Effect: When the price of one good goes up, people might switch to cheaper alternatives, which affects demand.
👉 Income Effect: When prices drop, people feel richer because their money buys more, leading to an increase in demand.
👉 Exceptions to the Law: Some goods (like luxury or “status” items) may not follow the law of demand because higher prices can make them more desirable. These are called Veblen goods.
What You Need to Demonstrate for the Exam ✨
At this level, you should be able to:
🔹 Explain the relationship between price and demand.
🔹 Understand the key factors that can shift the demand curve (like changes in consumer preferences or income).
🔹 Apply the concept of elasticity, which measures how much demand changes when prices change.
🔹 Use real-life examples to back up your understanding (think about how you shop—would you buy more ice cream if it was cheaper?).
Key Things to Remember Before the Exam 📝
💡 Revise diagrams! Make sure you can draw and explain the demand curve. Practice showing what happens when prices change or when other factors shift demand.
💡 Elasticity matters! Be prepared to talk about the concept of price elasticity of demand (PED). Know the difference between elastic and inelastic demand.
💡 Examples are your friend! Having clear examples (like movie tickets, designer clothes, or fast food) will help you explain the law of demand more easily.
💡 Stay calm. You’ve got this. Just take it one step at a time and break down your answers in a logical way. The examiners want to see that you understand how these concepts apply in real life. ✨
Mock Questions to Test Yourself! 🔥
Q1 - Which of the following would likely cause a movement along the demand curve for a good?
a) A change in consumer income
b) A change in the price of the good
c) A change in consumer preferences
d) A change in the price of a substitute good
Q2 - According to the law of demand, when the price of a product increases, what typically happens to the quantity demanded?
a) It increases
b) It decreases
c) It remains the same
d) It depends on the product
Q3 - If the price of a product decreases and the quantity demanded increases, this is an example of:
a) Supply and demand equilibrium
b) Elastic demand
c) The law of demand
d) The income effect
Q4 - What kind of good is an example of something that might not follow the law of demand?
a) Normal good
b) Inferior good
c) Veblen good
d) Complementary good
Q5 - If the demand for a product is price inelastic, what does that mean?
a) Demand increases when prices increase
b) Demand decreases drastically with price changes
c) Demand changes very little with price changes
d) Consumers stop buying the product entirely when prices rise
To check your answers and see more questions check out our GCSE Economics Multiple-Choice booklet, with 250 sample questions and answers for you to revise
You’ve done an awesome job reviewing! Keep up the great work, and you’ll be ready to tackle those exam questions like a pro. Stay confident, keep practicing, and don’t forget to take regular breaks while revising. You’ve got this! 🎉💪
Good luck! 🍀