Distinguish between the following: (a) wants and effective demand; [5 marks] (b) demand schedule and demand e; [5 marks] (c) individual demand and market de...

(a) Wants versus effective demand. A want is simply a desire for a commodity, whether or not the person can pay for it. Effective demand is a want that is backed by both the willingness and the ability to pay (purchasing power). A want becomes effective demand only when the consumer is able and ready to buy at the ruling price.

(b) Demand schedule versus demand curve. A demand schedule is a table showing the quantities of a commodity that consumers will buy at various prices. A demand curve is the graphical representation of that schedule, a line (usually sloping downward from left to right) plotting price against quantity demanded. The curve is drawn from the figures in the schedule.

(c) Individual demand versus market demand. Individual demand is the quantity of a commodity a single consumer is willing and able to buy at each price. Market demand is the total demand for the commodity by all consumers in the market, obtained by adding up the individual demands at each price.

(d) Change in demand versus change in quantity demanded. A change in quantity demanded is a movement along the same demand curve caused by a change in the good's own price. A change in demand is a shift of the whole demand curve (to the right or left) caused by changes in factors other than the good's own price, such as income, tastes, or the prices of related goods.