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

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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

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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
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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)
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5
Q

What is a merit good?

A

Goods that are more beneficial for consumers than they realise
- underconsumed
- positive externalities

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6
Q

What is a demerit good?

A

Goods that are more harmful than we realise
- overconsumed
- negative externalities

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7
Q

Impacts of productivity on a workforce - COR

A

Lower costs, lower prices, more competitive, more jobs and growth

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