Business THEME 1 SAMSON 1.2 Market Revision

Question 1

Define Rational Decision Making

Answer 1

Where economic agents make decisions to maximise their own benefit

Question 2

Explain what is meant by the term ‘rational behaviour’ for Parents using the daycare centre

Answer 2

Parents would look at the quality of the daycare such as checking the reviews left by other parents

Question 3

Define Subsidy

Answer 3

A sum of money paid by Gvernments to the producer in order to encourage production and reduce price

Question 4

What are some factors that can affect Demand

Answer 4

Advertising
Population Change
Fashion+ Consumer taste

Question 5

Explain the types of Demand

Answer 5

Joint Demand ( Increase in demand causes consumers demand to increase for another

Co

Question 6

Define Demand

Answer 6

The quantity that consumers ae willing to pay at any price

Question 7

Define Supply

Answer 7

The quantity that producers are willing and able to sell at any price at a specific period

Question 8

Define Equilibrium

Answer 8

Demand and Supply are equal

Question 9

Define PED (Price Elastic of Demand)

Answer 9

How responsive the quantity demanded of a good or service is to a change in price

Question 10

What factors influence PED

Answer 10

Availability of Substitutes, Brand Loyalty

Question 11

Define YED (Income elasticity of Demand)

Answer 11

How responsive the quantity demanded of a good or service is to a change in consumers income

Question 12

List the factors that influence YED

Question 13

Define elastic (MORE THAN 1)

Answer 13

Quantity demanded or supplied is relatively responsive to price changes

Question 14

Define Inelastic (LESS THAN 1)

Answer 14

Quantity demanded or supplied is less responsive to changes in price