demand/supply - theme 1.2 (book2)

Question 1

an external ______ is an ______ event that _____ an entire _______ direction.

Answer 1

an external shock is an unexpected event that changes an entire direction.

Question 2

a _______ chain is the _______ of processes involved in the _____ and _____ of a commodity.

Answer 2

a supply chain is the sequence of processes involved in the production and distribution of a commodity.

Question 3

a subsidy is a ________ provided by the ______ to ________.

Answer 3

a subsidy is a benefit provided by the government to producers.

Question 4

market ______ is the point at which ______ equals _____.

Answer 4

market equilibrium is the point at which demand equals supply.

Question 5

complimentary goods are goods which are usually _____ alongside _____ products.

Answer 5

complimentary goods are goods which are usually bought alongside other products.

Question 6

substitute goods are goods which are ______ as essentially the _____ or _______enough to ______ product.

Answer 6

substitute goods are goods which are seen as essentially the same or similar enough to another product.

Question 7

a _____ good is a good in which ____ increases when ______ increases.

Answer 7

a normal good is a good in which demand increases when incomes increase.

Question 8

an _______ good is a good in which demand ________ as incomes increase.

Answer 8

an inferior good is a good in which demand decreases as incomes increases.

Question 9

demand for a good or service is the ______ that consumers are _______ and _____ to buy at a given ______ and ________.

Answer 9

demand for a good or service is the quantity that consumers are willing and able to buy at a given price and time.

Question 10

what is the law of demand?

Answer 10

demand varies inversely with price (as price increases, demand decreases)

Question 11

how is a change in demand caused by price shown?

Answer 11

a movement along the curve.

Question 12

how is a change in demand caused by a factor other than price shown?

Answer 12

a shift left or right.

Question 13

4 causes of changes in demand

Answer 13

prices, incomes, changing tastes, advertising, external shocks, seasonal factors.

Question 14

necessity goods are goods where demand is income ________.
consumers ____ buy these regardless of changes in _______.
demand ______ as _______ increase.

Answer 14

necessity goods are goods where demand is income inelastic.
consumers will buy these regardless of changes in income.
demand increases as income increases.

Question 15

luxury goods are goods where _______ increases _____ is likely to increase. However, ______ goods will be favoured in times of ____ income.

Answer 15

luxury goods are goods where income increases, demand is likely to increase. However, necessity goods will be favoured in times of low income.

Question 16

inferior goods are where if incomes _____, demand is likely to ______.

Answer 16

inferior goods are where if incomes increase, demand is likely to decrease.

Question 17

supply is the quantity of a good or service that a producer is ____ and ____ to supply in the ____at a given ____ and given ____.

Answer 17

supply is the quantity of a good or service that a producer is willing and able to supply in the market at a given price and given time.

Question 18

what is the law of supply?

Answer 18

the law of supply is that the higher the price, the more quantity supplied.

Question 19

causes of changes in supply?

Answer 19

cost of production, external shocks, new technology, tax on supply, subsidies.

Question 20

subsidies are a form of government _______ support offered to ________ .

Answer 20

subsidies are a form of government financial support offered to producers.

Question 21

a change in supply caused by price?

Answer 21

movement along the curve

Question 22

a change in supply caused by a factor other than price?

Answer 22

shift left or right

Question 23

equilibrium is when _______ and supply are ______.

Answer 23

equilibrium is when demand and supply are equal.