Term
|
Definition
| A exchange of one thing for more of another, for example buying less apples so you can buy more oranges. |
|
|
Term
|
Definition
| These goods aren/t scare so they aren't brought and sold at a price because no cost of production is involved. |
|
|
Term
|
Definition
| Economic goods are goods which because of their scarcity and cost of production you have to pay a price to obtain. |
|
|
Term
| POSITIVE AND NORMATIVE STATEMENTS |
|
Definition
- Normative statements involve a value judgement and opinion.
- Positive statements can be scientifically proven and must have evidence |
|
|
Term
|
Definition
| A market is where there is a meeting of buyers and sellers for the purpose of exchanging goods and services. Firms usually sell and household consume. |
|
|
Term
|
Definition
| A demand curve shows the quantities of a good that households and consumers plan to purchase at different prices. |
|
|
Term
| WHAT CAUSES THE DEMAND CURVE TO SHIFT ? |
|
Definition
A change in any factors but the price will cause a shift in the demand curve, a change in price will cause a shift along the curve. Such as:
- Income
- Taxes
- Prices of substitute goods |
|
|
Term
|
Definition
| These are goods that are in competing demand such as Playstation and Xbox. |
|
|
Term
|
Definition
| When the supply and demand curves meet and there is no excess supply or any excess demand. |
|
|
Term
|
Definition
| Goods that are joint in demand, such as Bread and Butter. |
|
|
Term
| WHAT IS THE SUPPLY CURVE ? |
|
Definition
| The supply curve shows how much firms or corporations plan to supply at a given price. |
|
|
Term
| HOW TO SHIFT THE SUPPLY CURVE ? |
|
Definition
The supply curve shIfts if the conditions of supply change. Examples of these conditions of supply:
- Cost of production
- Indirect taxes
- Subsides |
|
|
Term
PRICE ELASTICITY OF DEMAND
(PED) |
|
Definition
PED shows the responsiveness of quantity demanded of a good or service to a change in its price.
PED = PROPORTIONATE CHANGE IN QUANTITY DEMANDED/ PROPTIONATE CHANGE IN PRICE |
|
|
