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32 Cards in this Set
- Front
- Back
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Definition of demand |
Demand is the quantity or a product that a consumer is willing and able to buy at different prices over a given period of time assuming all other things remain constant |
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Definition of supply |
Supply is the quantity of a product that a supplier is willing to sell at different prices over a given period of time assuming all other things remain constant |
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What type of relationship exists between quantity demanded and price? |
-A direct relationship exists -When price increases, quantity demanded fall -When price falls, quantity demanded rises |
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What type of relationship exists between quantity supplied and price? |
-A direct relationship -When price increase, quantity supplied increases too -When price falls, quantity supplied decreases |
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What are the two differences between Demand and Quantity demanded? |
1. Quantity demanded is influenced by the price of the product itself while demand is influenced by the other factors 2. A change in demand represents a shift in the entire demand curve while a change in quantity demanded will lead to a movement along the demand curve |
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What are the two differences that exist between Supply and Quantity supplied |
1. Quantity supplied is influenced by the price of the product itself while supply is influenced by the other factors 3. Quantity demanded 2. A change in supply represents a shift in the entire supply curve while a change in quantity supplied will lead to a movement along the supply curve |
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What is supply taking quantity supplied into consideration? |
Supply is the relationship which exists between quantity supplied and price |
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What is Demand taking quantity demanded into consideration? |
Demand is the relationship which exists between quantity demanded and price |
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Definition of quantity demanded |
Quantity demanded is the quantity of a product that a consumer is willing and able to buy at a particular price at a specific point in time |
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Definition of quantity supplied |
Quantity supplied is the quantity of a product that a supplier is willing to sell at a specific price at a specific point in time |
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A demand schedule can be used to produce a? |
Demand curve |
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A supply schedule can be used to produce a? |
Supply curve |
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What does a demand curve illustrates? |
It shows the inverse relationship between the quantity demanded and price |
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What does a supply curve illustrates? |
It shows the inverse relationship between the quantity supplied and price |
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What does the inverse relationship between quantity demanded and price ensues? |
It gives rise to the law of demand |
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What does the inverse relationship between quantity supplied and price ensues? |
It gives rise to the law of supply |
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What does the law of demand state? |
It states that more of a good will be demanded at a lower price than at a higher price |
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What does the law of supply state? |
It states that more of a good will be supplied at a higher price than at a lower price |
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In which direction goes the demand curve? |
From the top left to the bottom right |
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In which direction goes the supply curve? |
From the bottom left to the top right |
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What is an extension in demand? |
An extension in demand is when the price of the product falls and ensues in an increase in quantity demanded. It is illustrated by a movement upward the demand curve |
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What is a contraction in demand? |
A contraction in demand is when the price of the product rises and ensues in a decrease in the quantity demanded. It is illustrated by a movement downward the demand curve |
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What is a contraction in supply? |
A contraction in supply is when the price of the product falls and ensues in a fall in quantity supplied. It is illustrated by a movement downward the supply curve |
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What is an extension in supply? |
An extension in supply is when the price of the product rises and ensues in a rise in quantity supplied. It is illustrated by a movement upward the supply curve |
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What happens when there is a change in demand? |
-The demand curve shifts to the right or to the left -People will be able to buy more or less or the product at the same price |
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What happens when there is a change in supply? |
-The supply curve shifts to the right or to the left -Suppliers will supply more or less of a product at the same price |
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What is market supply? |
Market supply is the total supply of a product by all producers taken together at different prices over a given period of time, Ceteris Paribus |
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What is market demand? |
Market demand is the total demand of a product by all consumers taken together at different prices over a given period of time, Ceteris Paribus
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What is market equilibrium? |
-Quantity demanded just equal to quantity supplied
-Point of relative stability in terms of input and output -Neither surplus nor shortage -The equilibrium point is determined by the opposing forces of demand and supply -Known as the market clearing price |
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What are the 10 factors affecting demand? |
-Changes in disposable income -Changes in climatic conditions -Changes in population -Changes in tastes, preferences and fashion -Advertising and marketing strategies -Availability of credit facilities -Changes in government policies -Changes in economic conditions -Changes in the price of related goods -Expectations about future prices |
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What are the 8 factors supply? |
-Changes in climatic conditions -Changes in technology -Changes in labour productivity -Discovery or depletion of resources -Changes in cost of production -Wars and disasters -Prices of related goods -Taxes and subsidies |
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What is the value of tax or subsidy per unit? |
The vertical distance between the two curves |
