Supply & Demand

Question 1

DIMINISHING MARGINAL UTILITY

Answer 1

the decrease in satisfaction from consuming 1 more unit of a good/ service

Question 2

DEMAND

Answer 2

the quantity of a good that consumers are willing and able to purchase at each and every point in time

Question 3

remember!

Answer 3

A CHANGE IN PRICE CAUSES A MOVEMENT ALONG THE CURVE, A CHANGE IN ANY OTHER FACTOR CAUSES A SHIFT OF THE CURVE

Question 4

factors that cause the demand curve to shift

Answer 4

a change in:
Population
Legislation
Advertisement
Substitute goods
Trends
Interest rates
Complementary goods
Y income
Weather

Question 5

SUPPLY

Answer 5

the quantity of a good/ service that firms are willing and able to produce at each and every point in time

Question 6

remember! 2

Answer 6

LEFT IS LESS

Question 7

factors that cause the supply curve to shift

Answer 7

a change in:
Costs of production
Number of firms
Expectations
Weather
Subsidy/ tax

Question 8

EQUILLIBRIUM

Answer 8

the price at which the quantity supplied = quantity demanded

Question 9

EXCESS SUPPLY AND DEMAND

Answer 9

either supply exceeds demand (excess supply) or demand exceeds supply (excess demand) - always at the original price (P1)