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Year 11 Economics Definitions

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Define Demand- The willingness and ability of buyers to purchase different quantities of a good at different prices during a specific time period. Quantity Demanded- The number of units of a good purchased at a specific price. Market- Any place where people come together to buy and sell goods or services. Demand Schedule- The numerical representation of the law of demand. Demand Curve- The graphical representation of the law of demand. Law of Demand- A law stating that as the price of a good increases, the quantity demanded of the good decreases, and that as the price of a good decreases, the quantity demanded of the good increases. Use the terms demand and quantity demanded correctly in a sentence about concert tickets. Grace and her 2 friends …show more content…

Unit-elastic Demand- The type of demand that exists when the percentage change in quantity demanded is the same as the percentage change in price. Inelastic Demand- The type of demand that exists when the percentage change in quantity demanded is less than the percentage change price. Elastic Demand- The type of demand that exists when the percentage change in quantity demanded is greater than the percentage change in price. Does an increase in price necessarily bring about a higher total revenue? An increase in price doesn’t necessarily bring about a higher total revenue for example if demand is elastic then an increase in price will lead to a lower total revenue. The price of a good rises from $4.00 to $4.50, and as a result, total revenue falls from $400 to $350. Is the demand for the good elastic, inelastic, or unit-elastic? The demand for the good is elastic because as the price of the good rises the total revenue falls. Good A has 10 substitutes, and good B has 20 substitutes. The demand is more likely to be elastic for which …show more content…

What happens to demand for margarine as the price of butter rises? The demand for margarine rises as the price of butter rises. Explain what happens to the demand curve for apples as a consequence of each of the following. More people begin to prefer apples to oranges.- If more people begin to prefer apples to oranges than the price of apples will decrease because the demand increased and the prices of the oranges with increase. The price if peaches rises (peaches are a substitutes for apples).- If the price of peaches rises than the demand for apples will rise. People’s income rises (apples are a normal good).- If people’s income rises than the so will the demand for apples. 4. In each of the following, identify whether the demand is elastic, inelastic, or unit-elastic. The price of apples rises 10 percent as the quantity demanded of apples falls 20 percent.- Elastic The price of cars falls 5 percent as the quantity demanded of cars rises 10 percent.- Elastic The price if computers falls 10 percent as the quantity demanded of computers rises 10 percent.- Unit-elastic 5. State whether total revenue rises or falls in each of the following

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