AP Microeconomics Flashcards: Demand
Written by AP Content Team, Verified for 2026 AP Exams, Last updated: May 2026
Review key ideas with interactive flashcards. This set includes 19 cards to help you master important concepts.
What are 'determinants of consumer demand'?
Determinants of consumer demand are the non-price factors that can influence buying habits and cause the entire demand curve to shift.
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What are 'determinants of consumer demand'?
Determinants of consumer demand are the non-price factors that can influence buying habits and cause the entire demand curve to shift.
What is the difference between an incentive and a constraint for a consumer?
An incentive, like a lower price, encourages a consumer to act, while a constraint, like limited income or time, restricts their ability to act.
If the price of coffee, a substitute for tea, increases, what happens to the demand for tea?
An increase in the price of a substitute good like coffee will cause the demand curve for tea to shift to the right.
How is a change in quantity demanded represented on a demand curve graph?
A change in quantity demanded, caused by a change in the good's own-price, is represented as a movement along the demand curve.
How is the market demand curve derived?
The market demand curve is derived from the summation of all individual consumer demand curves or schedules for a particular good or service.
What is the law of demand?
The law of demand states that a change in a good's own-price causes a change in quantity demanded in the opposite direction.
What is the substitution effect?
The substitution effect is the change in consumption that results when a price change moves the consumer to a different point on the same indifference curve.
What causes the entire demand curve to shift?
Changes in the determinants of consumer demand, other than the good's own-price, cause the entire demand curve to shift.
What is the relationship between a demand curve and a marginal benefit curve?
The demand curve is also the marginal benefit curve, as it shows the maximum price a consumer is willing to pay for each additional unit.
What is the income effect?
The income effect is the change in consumption resulting from a change in real income, caused by a change in the price of a good.
What is the fundamental principle regarding how economic agents behave?
The fundamental principle is that economic agents, including consumers, respond to incentives.
How do buyers respond to changes in incentives and constraints?
Buyers alter their consumption choices in response to changes in incentives (like prices) and constraints (like income or regulations).
What is the relationship between price and quantity demanded?
There is an inverse relationship between price and quantity demanded; as price increases, quantity demanded decreases, and vice versa.
If a consumer's income decreases, how does this affect their decision making?
A decrease in income acts as a constraint, limiting the consumer's purchasing power and likely causing a shift in their demand curve for certain goods.
A popular new study reveals the health benefits of eating oranges. What is the likely effect on the demand curve for oranges?
This change in consumer tastes, a determinant of demand, would likely cause the demand curve for oranges to shift to the right.
Why is a well-defined system of property rights necessary for markets?
A well-defined system of property rights is necessary for the market system to function well by ensuring clear ownership and facilitating trade.
List three examples of constraints that individuals face.
Individuals face constraints such as limited income, time, and various legal and regulatory frameworks.
Besides the income and substitution effects, what other principle helps explain the law of demand?
Diminishing marginal utility also explains the downward-sloping demand curve, as consumers are willing to pay less for each additional unit consumed.
What are the two effects that explain the downward slope of the demand curve?
The downward slope of the demand curve is explained by the income effect and the substitution effect.