Demand + Supply

Question 1

latent demand

Answer 1

unable to actually buy (no money)

Question 2

effective demand

Answer 2

able to actually buy

Question 3

demand

Answer 3

the quantity of a good or service a consumer is willing and able to purchase at a given price

Question 4

market demand

Answer 4

the sum of the individual demand

Question 5

revenue

Answer 5

the income a business receives from selling its products

Question 6

supply

Answer 6

the quantity of a good/service that producers are willing and able to sell at each different price level

Question 7

consumer surplus

Answer 7

the difference between what consumers are willing to pay for a good/service and the price they actually pay

Question 8

producer surplus

Answer 8

the difference between what firms are willing to sell a good/service for and the price they are actually paid

Question 9

complements (joint demand)

Answer 9

goods that are consumed together

Question 10

substitudes

Answer 10

products that can replace each other

Question 11

composite demand

Answer 11

goods have more than one use

Question 12

derived demand

Answer 12

demand for a FOP is derived from the demand for the product it produces

Question 13

joint supply

Answer 13

two or more goods are produced

Question 14

Policy to increase demand for business

Answer 14

1. reducing the price of the good
2. advertising to increase demand
3. switch production to inferior goods