Consumer Behaviour
What is consumer behaviour?
It is how consumers choose and purchase goods and services.
What is demand?
The quantity of a product that consumers are willing to buy at a particular price.
What is supply?
The quantity of goods or services available for sale at a particular price.
What is equilibrium?
It is when the quantity demanded equals the quantity supplied.
Why do consumers have to make choices?
Because they have limited income and many needs and wants.
What usually happens to demand when the price of a product falls?
Demand usually increases.
What usually happens to supply when the price of a product rises?
Supply usually increases.
How can you find the point of equilibrium on a graph?
It is where the demand and supply curves cross
What is opportunity cost?
It is what you give up when you make a choice.
Name two factors, other than price, that can affect demand.
Advertising and trends or fashions
Name two factors, other than price, that can affect supply.
The cost of production and government action.
What is the black market?
A market where rules and laws are not followed.
What is the Law of Diminishing Marginal Utility?
The more of a product you consume, the less satisfaction you get from each extra unit.
What happens to the demand curve when demand increases?
It shifts to the right.
What happens to the supply curve when supply decreases?
It shifts to the left.
Why is the black market bad for legitimate businesses?
It takes customers away from businesses that follow the law and pay their taxes.