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42 Cards in this Set
- Front
- Back
Section A: Part One Chapter One |
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Demand |
The amount of a good that will be bought at given prices over a period of time |
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Exporters |
Firms that sell overseas |
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Market |
A set of arrangements allowing buyers and sellers to communicate and exchange goods and services |
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Market System or Price Mechanism |
The automatic determination of prices and the allocation of resources by the operation of markets in the economy |
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Price |
The amount of money that goods are exchanged for in a transaction |
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Supply |
The amount of a good that sellers are prepared to sell at given prices over a period of time |
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Chapter Two |
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Demand Curve |
A line drawn on a graph which shows how much of a good will be bought at different prices |
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Effective Demand |
The amount of a good that people are willing to buy at given prices over a given period of time backed by the ability to pay |
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Inverse Relationships (between price and quantity of demand) |
When price goes up the quantity demanded falls and when the price goes down the quantity demanded rises |
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Chapter Three |
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Complementary Goods |
Goods purchased together because they are consumed together |
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Inferior Good |
A good for which demand will fall if income rises or rise if income falls |
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Normal Good |
A good for which demand will rise if income rises or fall if income falls |
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Shift In The Demand Curve |
A movement to the left or right of the entire demand curve when there is a change in any factor affecting demand except price |
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Substitute Goods |
Goods bought as an alternative to another but preform the same function |
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Chapter Four |
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Supply Curve |
A line drawn on a graph that shows how much of a good sellers are willing to supply at different prices |
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Chapter Five |
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Advalorem Tax (VAT) |
A tax levied as a percentage of price of a good |
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Indirect Taxes |
Taxes imposed by the government on spending |
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Specific Tax |
A lump sum tax on the amount sold, per unit for example |
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Subsidy |
A grant given to producers, usually to encourage a production of a certain good |
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Chapter Six |
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Equilibrium Price |
Price where supply and demand are equal |
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Excess Demand |
Where demand is greater than supply and there are shortages in the market |
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Excess Supply |
Where supply is greater than demand and there are unsold goods in the market |
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Market Clearing Price |
Price where the amount supplied in a market matches exactly the amount demanded |
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Total Revenue |
The amount of money generated from the sale of goods calculated by multiplying price by quantity |
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Chapter Seven |
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PED |
Price elasticity of demand |
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Elastic Demand |
A change in price results in a more than proportional change in demand |
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Inelastic Demand |
A change in price leads to a less than proportional change in demand |
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Price Elasticity of Demand |
The responsiveness of demand to a change in price |
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Chapter Eight |
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Price elasticity of supply |
The response of supply to a change in price |
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Chapter Nine |
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Discretionary Expenditure |
Non-essential spending or spending that is not automatic |
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Income elasticity of demand |
The responsiveness of demand to a change in income |
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Chapter Ten |
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Unitary Elasticity |
Where price elasticity of demand for a product is equal to 1. For such a product total revenue is exactly the same at all prices |