1.2 KEY TERM

Question 1

Demand

Answer 1

quantity customers are willing and able to buy at a dioxin price in a time period

Question 2

Relationship of price and income to demand

Answer 2

price inc, demand dec

Income inc, demand inc

Question 3

Supply

Answer 3

quantity a buisness is able and willing to supply at a given price in a time period

-price inc supply inc

Question 4

Market equilibrium

(Graphs)

Answer 4

equity between market demand and supply

Question 5

Price elasticity of demand

Answer 5

extent to which quantity of a product demanded is affected by change in price

Question 6

Ped formula

Answer 6

% change in quantity demanded / % change in price x 100

Question 7

Ped more than 1

Answer 7

price elastic (change in price=big change in demand)

Question 8

Ped less than 1

Answer 8

Price inelastic

Question 9

Ped is 1

Answer 9

change in price= change in demand

Question 10

Income elasticity of demand

Answer 10

extent to which quantity of a product demanded is affected by change in income

Question 11

YED formula

Answer 11

% change in quantity demanded / % change in income x 100

Question 12

Yed more than 1

Answer 12

demand is responsive
(Luxury prod)

Question 13

Yed 0-1

Answer 13

demand not responsive
(Neccessity prod)

Question 14

Yed less than 1

Answer 14

demand responsive
(Inferior prod, people will but it when income dec)