Demand and Supply

Question 1

Define demand

Answer 1

The amount of a good or service someone is willing or able to buy at any given price

Question 2

Define supply

Answer 2

The amount of a good or service that sellers are willing or able to sell at any given price

Question 3

Define equilibrium

Answer 3

The equilibrium is when supply meets demand, all parties are satisfied

Question 4

What is meant by price

Answer 4

The amount of a good or service customers are willing and able to pay

Question 5

What happens to supply when price increases?

Answer 5

Supply increases

Question 6

What happens to demand when price increases?

Answer 6

Demand decreases

Question 7

Define wealth

Answer 7

A measure of the value of all assets of worth owned by a person, community, country or company

Question 8

What happens to demand if their is rising wealth in an area?

Answer 8

Demand increases

Question 9

Define advertising, and promotional offers

Answer 9

An announcement in public relations which generates immediate sales, product interest, trial or purchase.

Question 10

What happens to demand if a business uses adevertisments or promotional offers?

Answer 10

The demand will increase

Question 11

Define tastes and fashion

Answer 11

The most popular items in a market

Question 12

What happens to demand when tastes and fashions occur?

Answer 12

Demand increases

Question 13

Define demographic changes

Answer 13

Describes the people who live in an area who will be potential stake holders

Question 14

What happens to demand if the population increases?

Answer 14

Demand will increase because there are more potential stakeholders

Question 15

Define substitutes

Answer 15

Goods that you can consume in place of another

Question 16

What would be the effect in the demand curve if substitutes increased?

Answer 16

Demand would decrease, there are more available products on the market

Question 17

Define what is meant by tax

Answer 17

A compulsory donation to the state revenue

Question 18

What is the effect in the supply curve if taxes increase?

Answer 18

Supply will decrease

Question 19

Define subsidies

Answer 19

A government grant given to a business who produce beneficial goods, to encourage the production of these goods

Question 20

What is the effect on the supply curve if a business receives a subsidy?

Answer 20

Supply will increase because they will have more money to produce more products

Question 21

Define what is meant by the price of other products

Answer 21

Competitive supply. Where a business who supplies one product which depreciates in price may start supplying another which is more profitable

Question 22

What is meant by an excess of supply?

Answer 22

If the price is set too high, there’s an excess in supply

Question 23

What is meant by an excess in demand?

Answer 23

Price is set below the equilibrium, not enough to cater to the demand for the product