Economics Supply And Demand Igcse

Front 1

demand, quantity demanded

Back 1

want or willingness of consumers to buy goods and services. quantity demanded is measured at a certain price over a certain period of time

Front 2

extension of demand

Back 2

way in which demand changes with a fall in price, with no other factors involved

Front 3

contraction of demand

Back 3

way in which demand changes with a rise in price, with no other factors involved.

Front 4

utility

Back 4

the satisfaction the consumer gains from a good

Front 5

law of diminishing marginal utility

Back 5

the more of a good the consumer has, the less utility the consumer will gain from each extra unit

Front 6

ceteris paribus

Back 6

all other things remaining unchanged

Front 7

increase in demand (curve?)

Back 7

consumers now demand more at each and every price than they did before, curve shifts outwards

Front 8

causes for a shift in demand (7)

Back 8

incomes
income taxes
population
prices of other goods
tastes and fashion
advertising
other factors like weather

Front 9

inferior goods

Back 9

when people's incomes rise, the demand for these more basic goods will fall

Front 10

complementary goods, complements

Back 10

goods and services consumers jointly demand and want together like bread and butter, or tea and sugar

Front 11

substitutes

Back 11

a purchase of one good can replace the want of another one like margarine and butter.

Front 12

supply, quantity supplied

Back 12

amount of a good or service firms or producers are willing to make and sell at a number of possible prices, quantity measured per period of time

Front 13

market supply

Back 13

supply of all the individual producers competing to supply the good or service

Front 14

extension of supply

Back 14

supply rises with the rise in price, ceteris paribus

Front 15

contraction of supply

Back 15

supply falls with a fall in price, ceteris paribus

Front 16

increase in supply (curve change)

Back 16

producers are now more willing and able to supply at each price than they were before, curve shifts outwards

Front 17

fall in supply (curve change)

Back 17

producers are now less willing and able to supply than they were before, curve shifts inwards

Front 18

shifts in supply possible causes (5)

Back 18

changes in prices of other commodities- producers would rather use their resources on a more profitable commodity

changes in the costs of factors of production

technical progress

other factors like weather

gov. influences

Front 19

subsidies

Back 19

an amount of money the gov. gives a company to make it produce more

Front 20

market price, equilibrium price

Back 20

price at which the supply and demand meet (2 terms)

Front 21

disequilibrium

Back 21

when demand doesn't equal supply

Front 22

price elasticity of demand (and how they look on graphs)

Back 22

the responsiveness of quantity demanded given a change in the price of a good or service.

elastic- flatter demand slope
inelastic- steeper slope

Front 23

how to calculate price elasticity of demand

Back 23

% change in quantity demanded divided by % change in price

Front 24

how to tell if a product is price elastic or not

Back 24

when Ed is greater than one

Front 25

factors which affect price elasticity of demand (3)

Back 25

# substitutes

period of time --> consumers will have a longer time to find a cheaper substitute

proportion of income --> salt, for example, doesn't cost much in the first place so it wouldn't affect people much if it doubled in price

Front 26

perfectly price inelastic

Back 26

if the rise and fall of the price causes no change whatsoever in the demand of the product

Front 27

infinitely price elastic

Back 27

a commodity is only demanded at one price and one price only.

Front 28

unitary elasticity

Back 28

a the percentage change in price will exactly equal the percent change in demand, resulting in the total amount spent will remain the same at every single price.

Front 29

income elasticity of demand

inferior goods?

Back 29

how much a change in incompe causes the quantity demanded of a good or service to change

% change in quantity demanded divided by % change in income

inferior goods will be negative

Front 30

cross elasticity of demand (substitutes?) (complements?)

Back 30

how much quantity demanded will rise or fall given a change in the price of another product

change in quantity of good X divided by change in price of good Y

substitutes: always positive
complements: always negative- a rise in the price of one will cause a fall in demand for the other as a result of the contraction of its own demand

Front 31

price elasticity of supply and how graphs look

Back 31

the responsiveness of quantity supplied to a change in price

inelastic: steep slope
elastic: gradual slope

% change in quantity supplied divided by change in price

Front 32

factors that affect the price elasticity of supply

Back 32

time- like transportation, more labor, the seasons, how much a store has in stock at that time, etc.

availability of resources - if more factors of production are actually available to use to expand

Front 33

indirect taxes and how it affects the graph

Back 33

the gov. places taxes on goods and services, reducing market price and quantity traded.

they cause supply curves to shift upwards.