microeconomics
Part 1 : Demand For Goods and Services
Definition of demand
Classification of Goods and Services
Law of demand
Factors That Influence Demand (Determinants of demand)
Definition of demand
One of the definition of demand is known as the desire to buy goods and services with the ability to pay at a given time period.
Classification of Goods and Services
From conventional Economic Perspective:
i) Free goods – zero production cost. i.e. rain water and air ii) Public Goods – goods that will benefit the entire community. i.e. radio stations iii) Economic Goods – which supply is limited and involve cost to obtain them. i.e. clothing
From Islamic Perspective:
There are four types of consumer goods :
i) Dharuriyat (Essentials) – to satisfy human basic needs & necessary for living. i.e. clothing, houses, defense and etc. ii) Hajiyat (Complementary) – to improve the quality of life. i.e. furniture, car, phone and TV. iii) Kamaliat (Perfection) – to contribute towards the perfection of life. i.e. bungalows, luxury cars, high-powered motorbike and etc. iv) Tarafiat (Extravagant) – goods are considered wasteful and extravagant. i.e. golden chairs and etc.
Law of demand
The law of demand states that as price raises, the quantity demand decreases, ceteris paribus (all other factors remain the same), or as price decreases, the quantity demand increases, ceteris paribus (all other factors remain the same)
As price decreases, the quantity demand increases, ceteris paribus (all other factors remain the same)
As price rises, the quantity demand decreases, ceteris paribus (all other factors remain the same)
Factors That Influence Demand (Determinants of demand)
In the real world, there are other factors besides price that can affect the demand for goods.
The factors are:
Consumer’s income
The price of related goods
Consumer’s taste and preferences
The number of buyers in the
Definition of demand
Classification of Goods and Services
Law of demand
Factors That Influence Demand (Determinants of demand)
Definition of demand
One of the definition of demand is known as the desire to buy goods and services with the ability to pay at a given time period.
Classification of Goods and Services
From conventional Economic Perspective:
i) Free goods – zero production cost. i.e. rain water and air ii) Public Goods – goods that will benefit the entire community. i.e. radio stations iii) Economic Goods – which supply is limited and involve cost to obtain them. i.e. clothing
From Islamic Perspective:
There are four types of consumer goods :
i) Dharuriyat (Essentials) – to satisfy human basic needs & necessary for living. i.e. clothing, houses, defense and etc. ii) Hajiyat (Complementary) – to improve the quality of life. i.e. furniture, car, phone and TV. iii) Kamaliat (Perfection) – to contribute towards the perfection of life. i.e. bungalows, luxury cars, high-powered motorbike and etc. iv) Tarafiat (Extravagant) – goods are considered wasteful and extravagant. i.e. golden chairs and etc.
Law of demand
The law of demand states that as price raises, the quantity demand decreases, ceteris paribus (all other factors remain the same), or as price decreases, the quantity demand increases, ceteris paribus (all other factors remain the same)
As price decreases, the quantity demand increases, ceteris paribus (all other factors remain the same)
As price rises, the quantity demand decreases, ceteris paribus (all other factors remain the same)
Factors That Influence Demand (Determinants of demand)
In the real world, there are other factors besides price that can affect the demand for goods.
The factors are:
Consumer’s income
The price of related goods
Consumer’s taste and preferences
The number of buyers in the