definitions year 12

Question 1

demand

Answer 1

the amount consumers are willing to buy at each given price point

Question 2

effective demand

Answer 2

demand backed by the ability to pay

Question 3

extension in demand

Answer 3

increases in quality demanded caused by falls in price

Question 4

complementary good

Answer 4

good that are consumed together

Question 5

normal good

Answer 5

good and services that will see an increase in demand when incomes rise

Question 6

inferior goods

Answer 6

goods and services that will see a fall in demand when incomes rise

Question 7

composite demand

Answer 7

a good that is demanded for more than one purpose so that an increase in demand for one purpose reduces the supply for the other purposes

Question 8

derived demand

Answer 8

when the demand for one good or service comes from the demand for another good or services

Question 9

supply

Answer 9

the amount offered for sale by producers at each given price level

Question 10

ext in supply

Answer 10

when price of supply increases, quantity in supply increases too

Question 11

joint supply

Answer 11

when a change in supply for one products leads to a change of supply of BY PRODUCT

Question 12

contraction in supply

Answer 12

when price falls quantity supplied falls too

Question 13

equilibrium

Answer 13

the price at which demand is equal to supply and there is no tendency for change

Question 14

disequilibrium

Answer 14

price at which the market supply doesn’t equal demand

Question 15

value judgement

Answer 15

statements expressed that are not testable and depend of the views of an individual

Question 16

normative statements

Answer 16

opinions that require value judgements to be made

Question 17

positive statements

Answer 17

statements that can be rested against real world data

Question 18

opportunity cost

Answer 18

the loss of the next best alternative