The Market Economy (supply And Demand) Flashcards
(14 cards)
What is economics
Economics is a social science that examines how people use limited resources to make decision to satisfy their needs and wants
What is scarcity
Scarcity implies that there are not enough resources to satisfy all the desires and requirements of people. E.g Taylor swift and Coldplay tickets
What is a market economy
A market economy is an economic system where decisions about production and distribution are driven by the interactions of individuals and businesses in the market place
Role of consumers in the economy?
- Determine what goods and services are produced
- Provide information about habits, trends and preferences
- Pay for economic goods that they demand
What is demand
Demand is the quantity of a product that consumers are willing to purchase at a given price
What is the law of demand
The law of demand states that when the price of a product increases, the quantity demanded decreases, and vice versa.
What is individual demand
The quantity of a good or derive that an individual consumer is willing and able to purchase at various prices
What is market demand
The total quantity of a good or service that all consumers in a market are willing and able to buy at various prices
Factors affecting demand
Changes in income (more income), preferences, price of related goods, consumer expectations (how product is advertised), seasonal demand
What is supply
Supply refers to the quantity of a product that producers are willing to sell at a given price
What is the law of supply
The law of supply states that an increase in price will lead to an increase in quantity supplied and vice versa
Why do demand curves shift?
It happens due to factors other than the price of the good itself, for example if the consumer has more disposable income and so they are more inclined to buy goods and services.
Factors influencing supply?
Production costs
Technological advancements
Government policies
Number of suppliers
What is a movement along a demand curve?
What is a movement of a demand curve?
What is a movement along a supply curve?
What is a movement of a supply curve?
A movement of a demand curve is a change in quantity demanded caused by a non-price factor
A movement of a supply curve is the change in quantity supplied caused by non-price factors
A movement along a demand curve is a change in quantity demanded caused by a change in the price
A movement along a supply curve is a change in quantity supplied caused by a change in the price
