topic sheet 2

Question 1

main objective of consumers when making an economic decision

Answer 1

The main objective of consumers is to maximise utility

Question 2

main objective of producers when making economic decisions

Answer 2

The main objective of producers is to maximise profit

Question 3

effective demand

Answer 3

Effective demand is, demand when people actually have an ability to pay for the good or service

Question 4

main determinants of demand

Answer 4

Price (P), income (Y), Tastes and preferneces (t) and the price of other goods

Question 5

what does a point on a demand curve show

Answer 5

A point on the demand curve shows the amount go a good that will be sold at that price

Question 6

what would cause a movement along a demand curve

Answer 6

A change in price of the product would cause movement along a curve

Question 7

what would cause a shift in a demand curve

Answer 7

A change in demand would cause a shift in the demand curve this would mean that the product would be brought more or less at each price level

Question 8

give an example of something that would shift the demand curve for potatoes to the right

Answer 8

a shift to the right in the demand curve would be because a substitute for potato has increased in price e.g. rice, if the price of rice increased then people would be more inclined to by potatoes as they’re cheaper.

Question 9

give an example that would shift the demand curve for potatoes to the left

Answer 9

A shift to the left means there has been a decrease in demand, a shift to the left for potatoes would be because the price of an alternative as decreased