3: Definitions

Question 1

Competing supply

Answer 1

When resources can be used to produce one goods or another good, not both.

Question 2

Competitive market

Answer 2

A market with large number of buyers and sellers, with low barriers to entry an exit.

Question 3

Complimentary goods

Answer 3

Goods in joint demand; these goods are often brought together, e.g. printers and ink cartridges

Question 4

Composite demand

Answer 4

Demand for multi-purpose goods.

Question 5

Condition of demand

Answer 5

A determinant of demand other than the goods price, that sets the position of the goods demand curve.

Question 6

Condition of supply

Answer 6

A determinant of the supply other than a goods price, that sets the position of the goods supply curve.

Question 7

Customer sovereignty

Answer 7

Consumers can collectively govern production in a market via exercising spending power. The strongest imperfectly competitive markets.

Question 8

Cross elasticity of demand (XED)

Answer 8

Measures the responsiveness of a good demand to a change in the price of different good.

Question 9

Demand

Answer 9

The quantity of a good or service that consumer is willing enabled by at a given price, at a given time.

Question 10

Derived demand

Answer 10

Demand for a good that is the input of another good.

Question 11

Disequilibrium

Answer 11

Excessive supply or demand in a market.

Question 12

Effective demand

Answer 12

Desire for a good or service that is backed by the ability to pay for said good or service.

Question 13

Elasticity

Answer 13

The proportionate responsiveness of a second variable to a change in a first variable.

Question 14

Equilibrium

Answer 14

No excess supply or demand in a market: a state of balance between opposing forces.

Question 15

Equilibrium price

Answer 15

The price where planned demand matches planned supply.

Question 16

Excess demand

Answer 16

When consumers want to buy more than the producers are willing to sell. Occurs below equilibrium price.

Question 17

Excess supply

Answer 17

When producers want to sell more than the consumers are willing to buy. Occurs above equilibrium price.

Question 18

Exchange

Answer 18

Trading objects of value, utilising media of exchange, e.g. money.

Question 19

Income elasticity of demand (YED)

Answer 19

Measures the responsiveness of a good demand to a change in the incomes of consumers.

Question 20

Inferior goods

Answer 20

A good which demand rises as income falls.

Question 21

Joint supply

Answer 21

When one good is produced, another good is also produced from the same raw materials.

Question 22

Normal good

Answer 22

A good for which demand rises as income rises.

Question 23

Price elasticity of supply

Answer 23

Measures the responsiveness of a good supply to a change in price.

Question 24

Producer sovereignty

Answer 24

Producers determine what is produced and the price is charged.

Question 25

Substitute good

Answer 25

A good in competing demand. A good that can be used in place of another similar good.

Question 26

Supply

Answer 26

The quantity of a good or service that a producer is willing and able to sell at a given price at a given time.

Question 27

Income

Answer 27

Flow of money in a time period.

Question 28

Wealth

Answer 28

Sum or stock of all assets.

Question 29

Equality

Question 30

Inequality

Question 31

Equity

Answer 31

Fairness

Question 32

Inequity

Question 33

Shares

Question 34

Dividends