CHAPTER 2

Question 1

total amount of goods and services where consumers are willing and able to purchase at a various price levels over a period of time.

Answer 1

Demand

Question 2

KEY CONCEPTS IN
ECONOMICS

Answer 2

• DEMAND
• QUANTITY DEMAND
• LAW OF DEMAND

Question 3

(6) DETERMINANTS OF DEMAND:

Answer 3

1. PRICE OF GOOD
2. INCOME
3. PRICES OF RELATED GOODS
4. TASTES AND PREFERENCES
5. EXPECTATIONS
6. NUMBER OF BUYERS

Question 4

directly affects the quantity.

Answer 4

1. PRICE OF GOOD

Question 5

if the consumer’s ______ increases, their demands for their wants and needs also increases.

Answer 5

2. INCOME

Question 6

• may substitute at complementary

a. Substitute - cheaper alternative.
- Ex. When the coffee’s price increases, demands for tea increases.

b. Complementary - when 2 products are often used together.
- Ex. Coffee and creamer.

Answer 6

3. PRICES OF RELATED GOODS

Question 7

the subjective likes and dislikes of consumers that influence their purchasing decisions.

Answer 7

4. TASTES AND PREFERENCES

Question 8

if the consumers expect the price of a good to increase in the future, they might increase their demand now. Ex. Panic buying.

Answer 8

5. EXPECTATIONS

Question 9

As the population increase, the demand will also increase.

Answer 9

6. NUMBER OF BUYERS

Question 10

(all other things are being equal)

Answer 10

ceteris paribus

Question 11

OCCURS WHEN THERE IS A MOVEMENT ALONG THE DEMAND CURVE DUE TO A CHANGE IN THE PRICE OF THE GOOD ITSELF.

Answer 11

CHANGE IN QUANTITY
DEMANDED

Question 12

EXPLANATION OF THE LAW OF DEMAND:(2)

Answer 12

1. SUBSTITUTION EFFECT
2. INCOME EFFECT

Question 13

when prices of goods decreases, it becomes relatively cheaper compared to the _ when the price increases, consumers tend to buy cheaper alternative instead of the expensive one. - kung san mas mababa ang presyo, dun bibili

Answer 13

1. SUBSTITUTION EFFECT

Question 14

refers to individuals based on their income wherein it affects people’s purchasing power - when there is a decrease in prices, there is a high income/purchasing power of consumers. As a result, may high demand or madami

mabibili - pag may increase in prices, bababa ang income or purchasing power ng consumers, which results into lower demand.

Answer 14

2. INCOME EFFECT

Question 15

total amount of goods and services that producers are willing and able to offer for sale of various prices over a given period of time - relationship between the prices of goods and the quantity na willing iproduce at
ibenta sa market

Answer 15

Supply

Question 16

SUPPLY
- QUANTITY SUPPLIED
- LAW OF SUPPLY

Answer 16

KEY CONCEPTS IN
ECONOMICS

Question 17

(7) DETERMINANTS OF SUPPLY

Answer 17

1. PRICE OF THE GOOD
2. PRODUCTION COSTS
3. TECHNOLOGY
4. PRICE OF RELATED GOODS
5. GOVERNMENT POLICIES
6. NUMBER OF SELLERS
7. EXPECTATIONS

Question 18

high prices results to increase in profits. Dahil dito makakapagproduce ng marami ang company - lower prices = maliit ang profit = maunti ang magagawang production

Answer 18

1. PRICE OF THE GOOD

Question 19

Cost of inputs (labor, raw materials, capital) how much firms are willing to supply - high production cost = decrease in supply
- low production cost = increase in supply

Answer 19

2. PRODUCTION COSTS

Question 20

this reduces the production cost which results to increase in supply

• production became efficient due to technologies (ex. machinery)

Answer 20

3. TECHNOLOGY

Question 21

complementary/substitute goods may affect the firms decisions on what to supply

Answer 21

4. PRICE OF RELATED GOODS

Question 22

taxes, subsidies,

Answer 22

5. GOVERNMENT POLICIES

Question 23

refers to the increase of number of producers in the market

• as a result, dumadami ang supply for goods and services

Answer 23

6. NUMBER OF SELLERS

Question 24

if producers expects na price will increase in the future, they will decrease the supply ngayon sa present to sell more sa future.

Answer 24

7. EXPECTATIONS

Question 25

OCCURS WHEN THERE IS MOVEMENT ALONG THE SUPPLY CURVE DUE TO A CHANGE IN THE PRICE OF THE GOOD.

Answer 25

CHANGE IN QUANTITY SUPPLIED

Question 26

specific amount of goods and services that producers are willing and able to offer for sale.

Answer 26

Quantity Supplied

Question 27

if the price increases, the production that the producers are willing to supply also increases - if the price decreases, the production also decreases

Answer 27

ceterus parabus

Question 28

an increase in the price of goods or services results in an increase in their supply.

Answer 28

LAW OF SUPPLY

Question 29

EXPLANATION OF THE LAW OF SUPPLY

Answer 29

1. INCENTIVE FOR PRODUCERS 2. COSTS OF PRODUCTION

Question 30

high prices = high profits. Kaya mas ganado sila magsupply pa ng marami kasi alam nilang mataas ang profits na makukuha nila. (low prices = low profits.)

Answer 30

1. INCENTIVE FOR PRODUCERS

Question 31

if the firm expands increasing marginal cost - pag mataas ang ____ __ __________, magtaas ka ng presyo para mabawi yung nagastos mo.

Answer 31

2. COSTS OF PRODUCTION

Question 32

-total amount ng consumers na willing ipurchase

Answer 32

Demand

Question 33

specific amount

Answer 33

Quantity demanded

Question 34

- all states are being equal may relationship sa price of goods and demand

Answer 34

Law of demand

Question 35

- total amount of goods and services na willing iproduce ang producers

Answer 35

Supply

Question 36

specific amount

Answer 36

Quantity supplied

Question 37

- direct relationship between the price of goods and quantity supply

Answer 37

Law of Supply

Question 38

- if price increases, the quantity demand decreases - if price decreases the quantity demand increases

Answer 38

Law of Demand