1.2 Business key terms (part 1)

Question 1

complementary goods

Answer 1

goods that are purchased together because they are consumed together

e. g.
- printers and ink cartridges
- cars and petrol
- game counsels and games

Question 2

demand

Answer 2

the willingness and ability of consumers to buy goods and services, therefore then the quantity of products bought at a given price over a given period of time

Question 3

demand curve

Answer 3

the graphic representation of the law demand: the inverse relationship between price and quantity demanded
the demand curve slopes downward and to the right
as the price rises, demand goes down

Question 4

inferior goods

Answer 4

as income rises, demand for those goods decreases

but if income decreases, demand increases

Question 5

normal goods

Answer 5

as income rises, demand for those goods increases

but as income falls, demand decreases

Question 6

substitute goods

Answer 6

goods that can be bought as an alternatives to others, but perform the same functions
most likely bought as they are usually cheaper

Question 7

a movement along a demand curve is caused by..

Answer 7

change in the price

Question 8

supply

Answer 8

the amount of products that suppliers are willing and able to make available to the market at any given price in a given period of time

Question 9

subsidy

Answer 9

a grant given to producers/firms by the government to encourage the production of certain goods

Question 10

supply curve

Answer 10

the graphic representation of how much goods suppliers are willing to supply at different prices
the supply curve slopes upwards and to the right, there is a directly proportional relationship between price and supply
price inc = supply inc

Question 11

equilibrium price/market clearing price

Answer 11

the price when the quantity demanded is equal to quantity supplied
the point where demand and supply curve intersect

Question 12

excess demand

Answer 12

the position where demand is greater than supply at a given price and there are SHORTAGES in the market

Question 13

excess supply

Answer 13

the position where supply is greater than demand at a given price and there is a surplus in the market (unsold goods)

Question 14

total revenue/total expenditure

Answer 14

the amount of revenue generated from the sale of goods, calculated by:
price x quantity . in a given period of time