1.3.2.2 & 1.3.3.1 demand & supply

Question 1

demand

Answer 1

the quantity of goods or services that will be bought at any given price over a period of time

Question 2

factors that cause a shift in the demand curve

Answer 2

changes in:
1. price of substitutes
2. price/ demand of complementary goods
3. real income
4. tastes
5. size of population
6. age distribution of the population
7. legislation
8. advertising

Question 3

normal good

Answer 3

demand for this good rises when income rises

Question 4

inferior good

Answer 4

demand for this good falls when income rises

Question 5

marginal utility

Answer 5

additional utility gained from each additional unit of satisfaction

Question 6

diminishing marginal utility

Answer 6

as more units of a good is consumed, the additional utility the consumer gains from consuming each additional unit falls

Question 7

marginal benefit

Answer 7

the maximum amount a consumer is willing to pay for each additional unit of a good

Question 8

supply

Answer 8

the quantity o goods that sellers are pre spared to sell at any given price over a period of time

Question 9

factors that cause a shift in the supply curve?

Answer 9

changes in:
1. costs of production
2. introduction of new technology (that decreases cost of production)
3. availability of materials
4. number of firms
5. indirect taxes
6. government subsidies
7. natural disasters
8. prices of other goods
9. government legislation