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Chapter 2 ECO162 Demand

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Chapter 2 ECO162 Demand
Chapter II
Demand (DD) & Supply (SS)
 Classification of Goods & Services
• Conventional
• Islamic
 Demand (DD)
• Definition, Law of demand, Individual Demand Curve &
•
•
•
•
•

Market Demand
Determinants of demand
Changes in Quantity Demanded vs. Changes in Demand
Determinants of demand from Islamic Perspective
Exceptional Demand
Inter Related Demand

Demand (DD)
 Classification of Goods & Services
• Conventional Perspective
 Free goods – types of good does not require any

monetary cost eg. Rain & Air
 Public goods – it’s benefit the entire society even to produce it requires cost. Eg. Road & Public Park.
Central authority/Gov. provide these goods in order to improve the standard of living.
 Economic goods – to produce & obtain these goods requires cost. Eg. Food & Clothing. These goods are scarce compare to people’s wants for them.

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Demand (DD)
• Islamic Perspective – follow the hierarchy
i. Dharuriyat – essential/necessity products such as

food, clothing & shelter ii. Hajiyyat – complementarities that help in making our life more comfortable / improve quality of life such as car, air conditioner, TV, fan etc iii.Kamaliyat – luxuries products that help in perfecting our lives. Eg. Expensive car, big house/ bungalow etc iv.Tarafiat – extravagant or wasteful products that are not allowed in Islam such as gold pen, gold toilet seat Continue ...

Demand (DD)
 Definition :
 ability and willingness to buy specific quantity of goods

at particular of price in a given of time, ceteris paribus
(other factor constant, some others factors changes)
 Law of demand
 States that the higher price of the product the lower

quantity demanded and the lower price of the product the higher quantity demanded
 the relationship between price and quantity demanded are inverse or negative relationship

Continue ......

Demand (DD)

 The demand schedule &

demand Curve
(Individual)
• The demand schedule shows various amount of quantity that
buyer/customer
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