Lesson 7 - Demand And Supply Flashcards
1
Q
What is consumer surplus?
A
The extra amount that consumers would be willing to pay above what they actually pay
2
Q
What is producer surplus?
A
Extra amount producers gain from selling a good or service above what they were willing to sell for (sign the consumers are paying too much
3
Q
What factors cause a shift in demand?
A
- change in fashion/taste
- change in the price of substitutes
- change in the price of complements
- changes in disposable income
- advertising
4
Q
What factors cause a shift in supply?
A
- changes in productivity
- indirect taxes
- subsidies
- changes in the costs of production
- advances in technology
- changes in the price of other goods (profit elsewhere)
5
Q
What is a merit good?
A
Goods that are more beneficial for consumers than they realise
- underconsumed
- positive externalities
6
Q
What is a demerit good?
A
Goods that are more harmful than we realise
- overconsumed
- negative externalities
7
Q
Impacts of productivity on a workforce - COR
A
Lower costs, lower prices, more competitive, more jobs and growth
