Economics micro

Question 1

Define demand

Answer 1

The quantity of a particular good that consumers are willing and able to pay fo at a certain price for a certain period of time

Question 2

Define market demand

Answer 2

The sum of all individual demand in the market

Question 3

Define demand curve

Answer 3

Formed by a demand schedule which is a tabular report that consists of price and quantity demanded

Question 4

State the law of demand

Answer 4

Ceretis Parabus, there is an inverse relationship between a good’s pice and the quantity demanded by consumers

Question 5

What proves why they are inversely related/ different effects?

Answer 5

Income effect
Subsitution effect
Law of diminishing marginal utility

Question 6

Non-price determinants of demand

Answer 6

Income
Govt policy
Related goods
Demographic change
Seasonal change

Question 7

Exceptions to the theory of demand

Answer 7

Vertical demand curve
Veblen goods
Grifflin goods

Question 8

Define supply

Answer 8

amount of a source that produces are willing and able to provide to a marketplace

Question 8

Define supply

Answer 8

amount of a source that produces are willing and able to provide to a marketplace

Question 9

State the law of supply

Answer 9

Price goes up the quantity supplied goes up vice verse

Question 10

Explain why there is a positive casual relationship

Answer 10

Higher prices= higher potential profits= increase in quantity supplied
higher ‘average” prices encourage more products era to enter market, quantity supplied is increased

Question 11

Non price determinants of supply

Answer 11

Cost of factors of production
Changes in technology
Indirect taxes and subsidies
Changes in prices of related goods
Excpectations
Number of firms