topic 1.3.2

Question 1

define demand?

Answer 1

the willingness and ability of a consumer to buy goods and services at a specific price

Question 2

What are the factors that affect demand?

Answer 2

P- population
I- income
R-related goods
A- advertisment
T-taste and trends
E- expecation
S- seasonal

Question 3

define supply?

Answer 3

amount of products a producer are willing and able to provide at a given price

Question 4

What are the factors that affect supply?

Answer 4

P- production costs
I- indirect taxes
N- number of firms
T- technology
E- external shocks
W- weather
S- substitute

Question 5

go draw a demand and supply graph

Answer 5

search it up and see if you got it right

Question 6

What is price elasticity of demand (PED)?

Answer 6

measure the response of quantity demanded for a product to a change in price

Question 7

what is the formula for PED?

Answer 7

% change in quantity demanded / % change in price

Question 8

What are the factors affecting PED?

Answer 8

S- subsides
P- percentage of income
L- luxury
A- addiction
T- time

Question 9

What is the formula for total revenue?

Answer 9

price x quantity

Question 10

What is income elasticity of demand (YED)?

Answer 10

measure the response of quantity demanded for a product to a change of income

Question 11

What is the formula for YED?

Answer 11

% change in quantity demanded / & change in income

Question 12

Give examples of luxury, inferior and normal goods?

Answer 12

luxury - designer bag
inferior- fastfood
normal - milk