key economic terms

Question 1

What is demand in business?

Answer 1

The willingness of clients to buy commodities at particular prices.

Question 2

What does the law of demand indicate?

Answer 2

When prices of commodities are higher, the demand for those commodities goes down.

Question 3

What are the factors affecting demand?

Answer 3

Consumers’ income.
Price of the product.
Consumers’ expectations.
Preferences of clients.
Number of customers.
Prices of related goods.

Question 4

What is the difference between demand and quantity demanded?

Answer 4

Demand is the number of commodities that consumers are willing to purchase during a period of time.
Quantity demanded refers to the number of commodities people will purchase at a particular price at a specific time.

Question 5

What is the demand curve?

Answer 5

A representation of price against quantity demand for a period of time in a graph.

Question 6

What does movement along the demand curve indicate? za

Answer 6

A change in the quantity demanded.

Question 7

What is a Giffen good?

Answer 7

Products that customers consume more of when their prices rise.

Question 8

What is a Veblen good?

Answer 8

High-quality goods bought by wealthy consumers that do not follow the Law of Demand.

Question 9

What are the exemptions to the Law of Demand?

Answer 9

Giffen goods
Veblen goods
Income changes1`

Question 10

What is the definition of supply in economics?

Answer 10

The amount of an item that is available for use or purchase.

Question 11

What does the law of supply state in economics?

Answer 11

Supply will increase as price increases.

Question 12

What is the main difference between individual and market supply?

Answer 12

Individual supply refers to the amount of goods one seller offers.
Market supply is the total amount offered by the entire market.

Question 13

What does the law of supply state?

Answer 13

Supply increases as price increases to maximize profits.

Question 14

What is the scarcity principle?

Answer 14

Consumers place a higher value on resources that are scarce.

Question 15

What are the 2 types of scarce resources in economics?

Answer 15

Relative scarcity: Limited by the demand for the resource.
Absolute scarcity: Actual number on the amount of resources left in existence.

Question 16

What is a mixed market?

Answer 16

Economic system that incorporates elements of both capitalism and socialism.
Combines private and public ownership or control of resources and industries.

Question 17

What is the difference between a bull and a bear market?

Answer 17

Bull market: a period of rising prices in financial markets, typically associated with increased investor confidence, economic growth, and optimism.
Bear Market: a period of declining prices in financial markets, often associated with declining investor confidence, economic slowdown, and pessimism.

Question 18

What is socialism?

Answer 18

Economic system where the means of production (factories, resources, and capital) are owned and controlled by the state or public entities to ensure equal distribution of wealth and eliminate class distinctions.

Question 19

What is communism?

Answer 19

Economic and political ideology advocating for a classless society where all property and resources are communally owned, eliminating private ownership.

Question 19

What was feudalism?

Answer 19

Medieval European economic and social system based on the hierarchy of lords, vassals, and serfs, where land ownership and duties are exchanged for military service and labor.

Question 20

What was mercantilism?

Answer 20

Economic policy prevalent in Europe from the 16th to the 18th centuries, aimed at accumulating national wealth through a favorable balance of trade and the control of colonial resources.

Question 21

What is a command economy?

Answer 21

Economic system where the government makes all decisions regarding the production and distribution of goods and services.