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Demand, supply and the market
Karten in diesem Stapel (13)
- 1Define a 'market'A place or an arrangement where buyers and sellers exchange goods and services.
- 2Define 'demand'The quantity that buyers want to buy at a reasonable price.
- 3Define 'supply'The quantity of a good that sellers want to sell at a price that should make them profit.
- 4Define 'equilibrium price'The price at which supply meets demand.
- 5What's the difference between excess demand and excess supply?Excess demand is when demand for the item exceeds the supply.
Excess supply is when supply for the item exceeds the demand. - 6What's the difference between a 'substitute' and a 'complement'?A substitute is the best valued alternative e.g. if the price of petrol increases, there's always public transport.
A complement is something that works with the good i.e. petrol works with your car. - 7Define an 'inferior good'Usually, a cheap good that's low quality that some people would buy and others would spend a little more on the normal good.
- 8What is 'price control'?Government rules/laws setting price floors and ceilings.
- 9Define 'Economic Surplus'The sum of the consumer and the producer surplus.
- 10Define 'Consumer Surplus'The area below the market demand but ABOVE the equilibrium line.
- 11Define 'Producer Surplus'The area above the market demand but BELOW the equilibrium line.
- 12Define 'Price Ceiling'Reduces the quantity supplied to lead to excess demand.
Must be placed below equilibrium price for maxiumum effectiveness. - 13Define 'Price Floor'Reduces the quantity demanded, unless the government intervenes with another plan for the demand.
Must be placed above equilibrium price for maxiumum effectiveness.
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- Beschreibung
- Flashcards on 'demand, supply and the market' for South African students. (Made with love by a South African ECON1016 student at Wits University in 2015) Thank you to Wikipedia for the great economic surplus diagram :) http://en.wikipedia.org/wiki/Economic_surplus
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- BryanTurner
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