Demand And Supply

Question 1

Market

Answer 1

Market is a place where buyers and sellers interact and trade goods and services

Question 2

Types of markets

Answer 2

Final Markets
Factor Markets
Commodities Market
Global Markets
National Markets
Black Markets

Question 3

Final Markets

Answer 3

actual locations where goods are
bought and sold e.g. farmers market, supermarket

Question 4

Factor Markets

Answer 4

where factors of production are bought and sold e.g. labour market and property market

Question 5

Commodities Markets

Answer 5

where raw materials used in production are bought and sold e.g. oil, gold

Question 6

Black markets

Answer 6

where goods are sold illegally

Question 7

Demand

Answer 7

Demand is the quantity of a product that consumers are willing to buy at a given price.

● When prices are low, the demand for a product increases
● When prices are high, the demand for a product decreases

Question 8

Supply

Answer 8

Supply is the quantity of a product that producers are willing to sell at a given price.
● When prices are high, the supply of a product increases
● When prices are low, the supply of a product decreases

Question 9

Law of demand

Answer 9

● If the price of a product rises the quantity demanded falls
● If the price of a product falls the quantity demanded rises

Question 10

Factors affecting demand

Answer 10

Price, fashion, season, advertising, expectations of buyers, income levels, price of substitute goods, price of complementary goods

Question 11

Price

Answer 11

Whenthepriceofagoodgoesup,goodsaremoreexpensiveandthe demand will fall. When the price for a good goes down, goods are cheaper and the demand will rise.

Question 12

Fashion

Answer 12

As consumer tastes change, demand for products will change

Question 13

Season

Answer 13

Demandforsomeproductschangedependingontimeofyear

Question 14

Advertising

Answer 14

Productsthatareheavilyadvertisedmayseeanincreasein demand

Question 15

Expectations of buyers

Answer 15

If customers expect prices to rise in the future they may demand more now. Similarly, if customers expect prices to fall in the future, they may demand less now

Question 16

Income levels

Answer 16

If a person’s income rises, they will demand more goods and services

Question 17

Price of substitute goods

Answer 17

Some goods have close substitutes. This means they can be used as alternatives to each other. E.g. Coca Cola and Pepsi. When the price of Coca Cola goes up, some consumers may switch to the cheaper alternative Pepsi

Question 18

Price of complementary goods

Answer 18

Some goods are used jointly e.g. Tennis Racket and Tennis Balls. If the price of a Tennis racket goes up, the demand for Tennis balls will fall.

Question 19

Law of supply

Answer 19

● If the price of a product rises, the quantity supplied rises
● If the price of a product falls, the quantity supplied falls

Question 20

Labour

Answer 20

if a large number of people are unemployed in Dublin. There is excess supply, this means that workers will be willing to accept lower wages.

Question 21

Factors effecting supply

Answer 21

Price, price of related goods, production costs, technology, environment

Question 22

Price of related goods

Answer 22

The price of substitute and complementary goods may cause the consumers to switch to/stop buying our product which will affect the available supply of our product

Question 23

Production costs

Answer 23

W hen the cost of making a product is low, more goods will be supplied as it is cheaper

Question 24

Technology

Answer 24

improvements in technology and machinery make it easier for goods to be made which increases supply

Question 25

Environment

Answer 25

good/bad weather can affect a crop. Bad weather might mean the is less supply of wheat. Good weather might mean that there is to much supply of whea

Question 26

Demand curve

Answer 26

This is a graph that illustrates the expected demand for a product at different price levels

Question 27

Drawing a demand curve

Answer 27

Rules for Drawing a Demand Curve:
ALT
Notes Copy
A = Axis (Number & spread out your Axis evenly e.g. go up in 5’s or 10’s)
L = Label (Label your Axis: Price/Quantity)
T = Title (Give your graph a meaningful title)

Question 28

Supply curve

Answer 28

This is a graph that illustrates the quantity of a product that a seller will supply at different price levels

Question 29

Market equilibrium

Answer 29

In the marketplace, supply and demand interact until a balance or equilibrium position is reached

Question 30

Movement Along a Demand Curve

Answer 30

: This is caused by a change in the price of the good itself.

Question 31

Shift in the demand curve

Answer 31

This is caused by a change in any non-price factor affecting demand. E.g. a change in consumer income. A shift to the right results in an increase in the quantity demanded, while a shift to the left causes a fall in the quantity demanded

Question 32

Shift in the supply curve

Answer 32

This is caused by a change in any non-price factor of supply e.g.cost of production.
A shift to the right results in an increase in the quantity supplied, while a shift to the left causes a fall in the quantity supplied.