Economics Flashcards
Yr10
what is meant by demand
the individual demand curve illustrates the price people are willing to pay for a particular quantity of a good
what is meant by market demand
the market demand curve illustrates the price consumers in the whole economy are willing to pay
how do you construct a demand curve?
a change in price causes a movement along the demand curve.A higher price reduces demand.A lower price increases demand.movement changes when theres a change in price of the good or service,while a shift on the curve is to do with any other factor(taste prefrences,income)
what happens if demand shifts to the right?
theres an increase in demand at the same price because a factor e.g(higher incomes)has risen for it
what happens when the curve shifts to the left?
less of the good or service is demanded(buyers income has dropped)so they will buy less even if the price is still the same.
why might the demand curve shift to the right?
-increase in disposable income
-increase in the quality of the good
-advertising
-increase in the price of substitutes
what is meant by supply?
the supply curve refers to the quantity of a good that the producer plans to sell in the maket
what factors affect supply?
as price increases,firms have an incentive to supply more because they get extra revenue(income)from selling these goods.if price changes,there is movement along the supply curve.
what is joint supply?
when 2 goods are supplied together from the same source.(the supply of beef and leather are from the cow,so youll have an increase in both)
how do u construct a supply curve?
to construct an individual supply curve,we plot the amount a firm would supply at different prices.Giving us an upward sloping supply curve.
