LS8 - Demand

Question 1

Demand

Answer 1

Demand is the quantity of goods purchased at a given price over a certain time period

Question 2

Public and Private Sector and their Differences

Answer 2

Public sector is ran by the government. Private is by firms. Public sectors are generally less efficient because firms in the private sector face competition. They don’t need to minimise cost

Question 3

Movements on a demand curve

Answer 3

These are caused by changes within price level.
An increase in price level would cause an extension. A decrease in price level would result in a contraction.

Question 4

Substitute Goods

Answer 4

Two alternative products that can be used for the same purpose

Question 5

Complimentary Goods

Answer 5

These are goods which are used together

Question 6

Shifts in Demand

Answer 6

Shifts in demand are caused by changes in PASIFIC
Population - When population increases, demand increases
Advertising - Successful advertising would result in an increase in demand
Substitute goods - An increase in the price of Iphone’s would result in a decrease in demand and then an increase in demand of Samsung phones, a substitute good
Income - A rise in real income would increase demand as people are more able to afford products
Fashion/Preferences - A new fashion would result in an increase in demand of those goods in particular
Interest rates - As interest rates rise, borrowing becomes more expensive and so there are falls in demand of houses, cars and other expensive goods.

Question 7

Supply

Answer 7

The quantity of goods firms are willing to sell at a given price over a given period of time