Supply And Demand

Question 1

Demand

Answer 1

The amount that buyers are willing and able to purchase at a given price

Question 2

FOD

Answer 2

Population
Advertising
Substitutes
Income
Fashion
Interest rates
Compliments

Question 3

The Income effect

Answer 3

As the price of a good rises, real income falls

Question 4

Substitution effect

Answer 4

Assuming all other goods at a fixed price, if one good falls in price then customers will switch to that as it is relively less expensive (and vise versa)

Question 5

Law of diminishing marginal utility

Answer 5

The more something is consumer the less utility is received from it

Question 6

Market

Answer 6

Any place that brings together buyers and sellers with a view to agreeing a price

Question 7

Supply

Answer 7

The quantity offered for sale at a given price

Question 8

FOS

Answer 8

Productivity
Indirect tax
Number of firms
Technology
Subsidies

Weather
Cost of production

Question 9

PED definition

Answer 9

The proportional responsiveness of demand to a change in price of a good

Question 10

PED equation

Answer 10

Percentage change in quantity demanded / percentage change in price

Question 11

Perfectly elastic numerical value

Answer 11

Infinity

Question 12

Elastic numerical value

Answer 12

> 1

Question 13

Unit elastic

Answer 13

1

Question 14

Inelastic numerical value

Answer 14

<1

Question 15

Perfectly inelastic numerical valued

Answer 15

0

Question 16

Factors of PED

Answer 16

Strength and availability of substitutes
Addictive / habit forming
Luxuries / necessities
Percentage of income
Time period under consideration