MarketSystemIGCSE

Question 1

Exporters

Answer 1

Firms that sell overseas

Question 2

Price

Answer 2

The amount of money that goods or services are exchanged for in a transaction

Question 3

Market

Answer 3

A set of arrangements allowing buyers and sellers to communicate and exchange goods and services

Question 4

Demand

Answer 4

the quantity of a good or service individuals are willing to purchase at various prices and it Depends on individuals’ needs and wants as well as their income

Question 5

Price Mechanism

Answer 5

The system in a market economy whereby changes in price in response to changes in demand and supply have the effect of making demand equal to supply.

Question 6

Demand Curve

Answer 6

A graph of the relationship between the price of a good and the quantity demanded.

Question 7

Effective Demand

Answer 7

Demand supported by the ability to pay for a good or service

Question 8

Inverse Relationship

Answer 8

The relationship between two variables that change in opposite directions for example: product price and quantity demanded.

Question 9

Complementary Goods

Answer 9

Products and services that are used together. When the price of one falls the demand for the other increases (and conversely).

Question 10

Inferior Goods

Answer 10

Goods for which demand tends to fall when ‘income’ rises.

Question 11

Normal Goods

Answer 11

Goods for which demand goes up when income is higher and for which demand goes down when income is lower.

Question 12

Substitute Goods

Answer 12

goods that can be used to replace the purchase of similar goods when prices rise

Question 13

Shift in the demand curve

Answer 13

a movement to the left or tight of the entire demand curve when there is a change in any factor affecting demand except the price

Question 14

Supply Curve

Answer 14

A graph illustrating how much of a product a firm will sell at different prices.

Question 15

Advalorem Tax

Answer 15

A tax levied as a percentage of the price of a good

Question 16

Indirect Taxes

Answer 16

Taxes imposed by the government on spending

Question 17

Subsidy

Answer 17

A government payment that supports a business or market

Question 18

Equilibrium Price

Answer 18

the price that balances quantity supplied and quantity demanded

Question 19

Excess Demand

Answer 19

when quantity demanded is more than quantity supplied

Question 20

Excess Supply

Answer 20

when quantity supplied is more than quantity demanded

Question 21

Market Clearing Price

Answer 21

Price where the amount supplied in a market matches exactly the amount demanded.

Question 22

Total Revenue

Answer 22

Price x Quantity; the total amount of money a firm receives by selling goods or services

Question 23

Elastic Demand

Answer 23

A situation in which consumer demand is sensitive to changes in price.

Question 24

Inelastic Demand

Answer 24

A situation in which an increase or a decrease in price will not significantly affect demand for the product.

Question 25

Price Elasticity of Demand

Answer 25

A measure of how responsive demand for a product is to changes in price

Question 26

Factors of Production

Answer 26

Land Labor Capital Entrepreneurship

Question 27

Land

Answer 27

One of the factors of production. Natural factors needed to produce including the land used and all raw materials

Question 28

Labour

Answer 28

One of the factors of production - workers

Question 29

Capital

Answer 29

One of the factors of production. Man made factors needed to produce including buildings machinary money

Question 30

Entreprenuership

Answer 30

One of the factors of production. Creatively combining natural resources human labor and capital in unique ways to develop new and and useful goods and services

Question 31

Scarcity

Answer 31

A situation in which unlimited wants exceed the limited resources available to fulfill those wants

Question 32

Basic Economic Problem

Answer 32

Allocation of a nation’s scarce resources between competing uses that represent infinite wants

Question 33

Choice

Answer 33

Decision made or course of action taken when faced with a set of alternatives.

Question 34

Needs

Answer 34

Items necessary for existence such as clothing food and shelter.

Question 35

Wants

Answer 35

Goods that are purchased to add comfort or pleasure to life

Question 36

Opportunity Cost

Answer 36

Cost of the next best alternative use of money time or resources when one choice is made rather than another

Question 37

Unitary elasticity

Answer 37

A situation in which total revenue remains the same when prices change. (PED = 1)

Question 38

Perfectly Elastic

Answer 38

In this special case the demand curve is horizontal meaning consumers have an instantaneous & infinite response to a change in price

Question 39

Perfectly Inelastic

Answer 39

When buyers are completely unresponsive to a change in price. When the calculated elasticity is 0

Question 40

Economics

Answer 40

study of how people and societies use limited resources to satisfy unlimited wants; the management of scarcity and choice

Question 41

Surplus

Answer 41

A situation in which quantity supplied is greater than quantity demanded (also excess supply)

Question 42

Shortage

Answer 42

A situation in which quantity demanded is greater than quantity supplied (also excess demand)

Question 43

Services

Answer 43

Actions or activities that one person performs for another

Question 44

Supply

Answer 44

How much of a good or service a producer is willing and able to produce at different prices.