Markets - deffentiions

Question 1

market

Answer 1

any situation where buyers and sellers come together to exchange goods and services for money.

Question 2

demand curve

Answer 2

a model that illustrates the relationship between the price of a good and the quantity of a good that would be demanded.

Question 3

demographics

Answer 3

the composition of society in terms of age profile, gender profile or number of people living in a particular area.

Question 4

external shocks

Answer 4

an event that occurs outside of a business that has a direct impact o production.

Question 5

subsitiute goods

Answer 5

a good that can act as a replacement for another good.

Question 6

complimentary goods

Answer 6

those that are jointly demanded. E.g. tennis rackets and balls

Question 7

supply

Answer 7

the quantities of a good firm are willing to offer to the market at a variety of prices, over a given time period, all other things remain the same.

Question 8

supply curve

Answer 8

illustrates a relationship between the price of a good and the quantity of that good, businesses are willing to supply to a market.

Question 9

cost of production

Answer 9

how much it costs a firm to produce a product. it affects the firms willingness to supply units of goods

Question 10

indirect taxes

Answer 10

taxes (only added when you buy something in a shop) on expenditure (action on spending funds) e.g. VAT (20%). If indirect taxes rise, it raises a firm’s cost of production

Question 11

subsidies

Answer 11

grants that are given by the government to firms. They lower a firm’s cost of production and therefore incentivise firms to increase production of the good.

Question 12

subsidies

Answer 12

grants that are given by the government to firms. They lower a firm’s cost of production and therefore incentivise firms to increase production of the good.

Question 13

disequilibrium

Answer 13

(more supply than can sell) is an unstable position in a market because demand and supply are not equal.

Question 14

market equlibirum

Answer 14

stable position in a market where there is no incentive for anything to change. (This is because demand equals supply at market equilibrium).

Question 15

excess demand

Answer 15

demand is greater than supply

Question 16

price elasticity demand

Answer 16

the responsiveness of demand to a change in the price of a good or a service (if the price changes will the consumer still buy the product).

Question 17

price elastic

Answer 17

any change in the price of a good or service will lead to a greater than proportional change in QD. This suggests that if demand is price elastic, consumers are sensitive to a price change.

Question 18

price inelastic

Answer 18

Consumers are not sensitve to price change. any change in price will lead to a less than proportional change in QD.

Question 19

Income elasticity of demand (YED)

Answer 19

the responsiveness of demand to a change in income.

Question 20

normal good

Answer 20

goods whereas income rises, QD rises and vice versa.

Question 21

Inferiror good

Answer 21

if a household is given more income, they will buy less of an inferior good

Question 22

sales revanue

Answer 22

the value of sale a business generates in a given period of time

Question 23

variable cost

Answer 23

A cost that varies directly with the amount of output produced e.g. raw materials