Demand And Supply

Question 1

Factors that cause a shift in demand

Answer 1

Changes in disposable income
Taxes and government spending
(Normal and inferior goods)
Changes in prices of other goods
(Complimentary and substitute goods)
Interest rates
Change in population
Change of taste in fashion
Advertising

Question 2

Factors other then price that affect supply

Answer 2

Changes in costs of production
Changes in prices of other commodities
Technical process
Weather
Government- Taxes and subsidies

Question 3

Equilibrium point

Answer 3

Where there is as much suppliers willing and able to supply a good as people willing and able to demand a product

Question 4

PED

Answer 4

Price elasticity of demand
This measures the responsiveness of sensitivity of demand when price changes

Question 5

Determinants of PED

Answer 5

Degree of necessity
Habit forming goods
Number of substitutes a product has
Proportion of income spent on a commodity

Question 6

Special supply and demand curves

Answer 6

Unitary elastic
Perfectly elastic
Perfectly inelastic

Question 7

Determinants of PES

Answer 7

Degree of spare productive capacity
(Excess space)
Level of stocks
The time period