Micro unit 3

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Demand
the quantity of goods/services consumers are willing and able to buy at a given price in a given time period
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Effective Demand
when a desire to buy a product is backed up by an ability to pay for it
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Latent Demand
when there is a willingness to buy a good/service but the consumer lacks the purchasing power to be able to afford the product
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Composite Demand
Demand for a good, which has more than one use. Increase in demand for on use = reduces supply of good for other use (e.g. wheat for biofuel or food)
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Derived Demand
when the demand for a product comes from the demand for another product (e.g. cars and steel)
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Price Elasticity of Demand
measure of the responsiveness of a change in demand to a change in price
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Income Elasticity of Demand
measure of the responsiveness of a change in demand to a change in income
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Cross Elasticity of Demand
measure of the responsiveness of change in demand for a good to a change in price of another
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Supply
the quantity of goods/services that producers are willing and able to supply at a given price in a given time period
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joint supply
when the production of one good results in the production of another (e.g. demand for beef increased supply of leather)
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Price Elasticity of Supply
measure of the responsiveness of a change in supply to a change in price
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Price Functions - SIR
Signalling (sändning message to market) Incentive (buyer/seller will change their habits) Rationing (buyer/seller restricts)
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Other cards in this set

Card 2

Front

when a desire to buy a product is backed up by an ability to pay for it

Back

Effective Demand

Card 3

Front

when there is a willingness to buy a good/service but the consumer lacks the purchasing power to be able to afford the product

Back

Preview of the back of card 3

Card 4

Front

Demand for a good, which has more than one use. Increase in demand for on use = reduces supply of good for other use (e.g. wheat for biofuel or food)

Back

Preview of the back of card 4

Card 5

Front

when the demand for a product comes from the demand for another product (e.g. cars and steel)

Back

Preview of the back of card 5
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