1. The Market System :Unit 3 -7 Flashcards
- What is the demand curve?
line drawn on a graph that shows how much of a good will be bought at different prices.
- What is demand?
demand is the willingness and ability of a person to buy a good at a given price over a given period of time supported by the ability to pay.
- What is the relationship between price and demand?
- inverse relationship.
- What is disposable income?
- income that is available to someone over a period of time spent: it includes state benefits but excludes direct taxes.
- What are the 6 factors that may shift the demand curve?
Fashion and tastes.
Price of substitutes.
Price of complementary.
Advertising.
Income.
Demographic changes.
- What are inferior goods?
goods for which demand will fall if income rises or rise if income falls.
- What are the normal goods?
goods for which demand will increase if income increases or fall if income falls.
- What are the substitute goods?
- goods bought as an alternative to another but perform the same function.
- What are complementary goods?
goods purchased together because they are consumed together.
- What is supply?
amount that producers are willing to offer for sale at different prices in a given period of time.
- What is the relationship between supply and price?
- Proportionate relationship
- What are the 5 factors that may shift supply curve?
- Production costs.
- Indirect taxes.
-Natural factors.
-Technology advances.
-Subsidies.
- What is indirect taxes?
taxes levied on spending such as VAT.
- What is productivity?
- rate at which goods are produced and the
the amount produced in relation to work, time and money needed to produce them
- What is consumption?
- amount of goods, services, energy, or natural materials used in a particular period of time.
- What is subsidy?
money that is paid by a government or organization to make prices lower, reduce the cost of producing goods, or provide a service, usually to encourage the production of a certain good.
- What is the equilibrium price?(market clearing price)
- price at which supply and demand are equal.
- What is total revenue?
- the amount of money generated from the sale of goods calculated by multiplying the price by quantity.
- What is excess demand?
- What is excess supply?
- excess demand is where demand is greater than supply and there are shortages in the market.
- excess supply is where supply is greater than demand and there are unsold goods in the market.
