theme 1

Question 1

what is price elasticity of demand (PED)

Answer 1

measures how responsive demand is to price change.

Question 2

calculation for PED

Answer 2

%change in quantity/ %change in price

Question 3

what is income elasticity of demand (YED)

Answer 3

measure of responsiveness of demand to a change in income

Question 4

what is demand

Answer 4

number of consumers willing and able to purchase a good/ service at a given price.

Question 5

demand curves

Answer 5

shows quantity demanded for a good at any given price over a period of time.

• as price decreases, demand increases
• as price increases, demand decreases

Question 6

what way does curve shift when demand increases

Answer 6

shifts outward (right)

Question 7

what way does the curve shift when demand decreases

Answer 7

shifts inwards (left)

Question 8

what is supply

Answer 8

number of goods/ services that producers are willing and able to supply at a given price

Question 9

supply curve

Answer 9

representation of relationship between quantity supplied and price

Question 10

what is equilibrium

Answer 10

state of equality/ balance between supply and demand

Question 11

what is a shortage in the market

Answer 11

where quantity demanded exceeds the quantity supplied

Question 12

what is a surplus in the market

Answer 12

quantity supplied exceeds quantity demanded

Question 13

percentage change calculation

Answer 13

new-old / old x100

Question 14

income elastic

Answer 14

changes in income = big demand change

Question 15

income inelastic

Answer 15

changes in income = small demand change

Question 16

PED greater than 1

Answer 16

elastic

Question 17

PED less than 1

Answer 17

inelastic

Question 18

PED equal to 1

Answer 18

unitary elasticity

Question 19

what is protectionism

Answer 19

involves any attempt by a country to impose restrictions on trade of goods/ services

Question 20

reasons for protectionism

Answer 20

protect domestic market from overseas competition(eg through tariffs)
protection of domestic jobs

Question 21

what is a tariff

Answer 21

tax imposed onto imports into a country

Question 22

what is a quota

Answer 22

limit on goods that can enter a country

Question 23

what is a subsidy

Answer 23

financial support given to domestic producers eg. grants/ interest free loans by government

Question 24

what is a common market

Answer 24

more integrated type of trading bloc where goods, labour and capital can move freely between member countries.

Question 25

what is dumping

Answer 25

foreign producers sell goods below cost price in domestic market

Question 26

what is a trade bloc

Answer 26

group of countries that have signed agreement to reduce/eliminate trade barriers.

Question 27

what is import licensing

Answer 27

governments grant importers permission the right to import goods

Question 28

what is technical barriers to trade

Answer 28

product labelling rules stringent sanitary standards

Question 29

what is intellectual property laws

Answer 29

patents and copyright protection of domestic markets and ideas

Question 30

BRICS countries

Answer 30

``` Brazil Russia India China South Africa ```

Question 31

MINT countries

Answer 31

Mexico indonesia nigeria turkey

Question 32

what is globalisation

Answer 32

process of making world more inter-dependent | business going international

Question 33

what is an emerging economy

Answer 33

economy in process of rapid growth

Question 34

what is GDP

Answer 34

gross domestic product measures size of economy sum of everything a country produces

Question 35

what is GDP per Capita

Answer 35

countries total GDP divided by population

Question 36

what is HDI

Answer 36

human development index -life expectancy, education and income of country tracks countries progress

Question 37

HDI limitations

Answer 37

doesn't consider qualitative factors eg. cultural identity/ political freedoms doesnt consider income distribution