Topic 2 key words

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Demand
The amount society is willing and able to buy at a set price at a given point in time
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Supply
The amount of a product that producers are willing and able to sell at any given price
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Normal Good
If price rises, demand falls - there is a negative correlation and a positive YED
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Inferior Good
If income increases, demand decreases - there is a positive YED
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Complimentary Goods
Two or more products bought alongside each other
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Necessities
It is less likely demand will change regardless of income
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Luxuries
If income increases, demand is likely to increase
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Price Elasticity of Demand (PED)
Responsiveness to price increase or quantity demanded decrease
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Income Elasticity of Demand (YED)
Responsiveness to quantity demanded increase or income increase
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External Shocks
Unexpected events outside of the business' control which effects demand
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Seasonality
Demand fluctuations depending on the time of year
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Indirect Taxes
Tax placed on goods and services on individual firms eg. VAT
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Subsidies
Finance provided by the government to encourage production as it is cheaper to produce a product
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Other cards in this set

Card 2

Front

The amount of a product that producers are willing and able to sell at any given price

Back

Supply

Card 3

Front

If price rises, demand falls - there is a negative correlation and a positive YED

Back

Preview of the back of card 3

Card 4

Front

If income increases, demand decreases - there is a positive YED

Back

Preview of the back of card 4

Card 5

Front

Two or more products bought alongside each other

Back

Preview of the back of card 5
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