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Flashcards in 1.2 market Deck (50)
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1

what is demand?

- the quantity of goods or services that consumers are willing and able to buy at any given price

2

what are the conditions of demand?

- population
- income
- related goods
- advertising
- tastes
- expectations
- season

3

how do you remember conditions of demand?

- PIRATES

4

what can a change in price lead to?

- an extension/contraction in demand

5

what is supply?

- shows the quantity of goods that suppliers are willing to sell at any given price

6

an increase in price will lead to a what of supply?

- extension

7

what do the conditions of supply all effect?

- unit costs

8

what are the conditions of supply?

- cost of production
- other (legislations)
- price of other goods
- technology

9

how do you remember conditions of supply?

- COPT

10

what direction will the supply curve shift to indicate that there is a reduction in quantity supplied at every given price?

- left

11

what direction is the demand curve?

- downward slopping

12

what is the equilibrium in the market?

- everything made is being sold #
- 'market clearing' price

13

what will happen if there's an excess of demand?

- price will rise to new market clearing
- a new equilibrium will be created

14

what will happen if there's an excess supply?

- price must fall to the new market clearing price

15

what is an excess demand?

- price decreases which leads to an excess demand and suppliers aren't willing to supply Q2

16

what is price elasticity of demand?

- the responsiveness of changes in quantity demanded in relation to change in price

17

what's the formula for price elasticity of demand?

percentage change in quantity demanded
------------------------------------------------------------
percentage change in price

18

what's the formula for percentage change?

new value - original value
------------------------------------- X 100
original value

19

what is PED greater than 1?

- price elastic

20

what is price elastic?

- a change in price leads to a greater than proportionate change in demand

21

what is a PED between 0 and 1?

- price inelastic

22

what is price inelastic?

- a change in price leads to a lesser than proportionate change in demand

23

what is a PED of 1?

- unit elasticity

24

what is unit elasticity?

- a change in price leads to an exactly proportionate change in demand

25

what is a PED of ∞?

- perfectly elastic

26

what is perfectly elastic?

- producers can sell as much as they want at the current price

27

what is a PED of 0?

- perfectly inelastic

28

what is perfectly inelastic?

- consumers are willing to pay and price for a given amount

29

what is quantitative data?

- concerned with data
- based on larger samples, therefore more valid

30

what are example of finding quantitative data?

- surveys
- telephone
- postal