Demand & Supply (Miss Blackwell)

Question 1

Demand

Answer 1

The amount of a product/service that customers are willing and able to buy at any given price.

Question 2

Supply

Answer 2

The amount of a product/service that sellers are willing and able to sell at any given price.

Question 3

Equilibrium Price

Answer 3

The situation in a market where demand is equal to supply.

Question 4

With excess demand the price will…?

Answer 4

Increase

Question 5

With excess supply the price will…?

Answer 5

Decrease

Question 6

As price decreases, demand…?

Answer 6

Increases

Question 7

As a person’s income increases, demand…?

Answer 7

Increases

Question 8

Price

Answer 8

The amount that a customer is willing and able to pay.

Question 9

When price increases, supply…?

Answer 9

Increases

Question 10

When price decreases, supply…?

Answer 10

Decreases

Question 11

Cost

Answer 11

The amount spent by a business making/buying/supplying the product.

Question 12

As cost decreases, supply…?

Answer 12

Increases

Question 13

As cost increases, supply…?

Answer 13

Decreases

Question 14

Taxes

Answer 14

A compulsory contribution to state revenue by the government.

Question 15

As taxes increase, supply will…?

Answer 15

Decrease

Question 16

Subsidies

Answer 16

A sum of money granted by the state / public bodies.

Question 17

As subsidies increase, supply will…?

Answer 17

Increase

Question 18

If the price of one product decreases, but the price for a similar one stays the same, supply for that one will?

Answer 18

Increase

Question 19

With product surplus, what needs to happen to price?

Answer 19

Decrease

Question 20

With product shortage, what needs to happen to price?

Answer 20

Increase

Question 21

Elasticity of Demand

Answer 21

Measures how sensitive quantity demanded changes with a change in price.

Question 22

Inelastic Demand

Answer 22

The quantity demanded is insensitive to price change.

Question 23

Elastic Demand

Answer 23

Quantity is sensitive to a change in price.

Question 24

Elastic products can be described as…?

Answer 24

Luxury Products

Question 25

Why might demand be inelastic? (2 reasons)

Answer 25

No substitutes, because it’s a necessity, might be a habitual consumption, peak demand.