Podcast
Questions and Answers
Which factor is NOT considered a non-price determinant of demand?
Which factor is NOT considered a non-price determinant of demand?
- Taste
- Income
- Population
- Price of the product (correct)
What does the demand function Qd = 120 - 4P indicate about the relationship between price and quantity demanded?
What does the demand function Qd = 120 - 4P indicate about the relationship between price and quantity demanded?
- Quantity demanded decreases as price increases (correct)
- Quantity demanded decreases as price decreases
- Quantity demanded increases as price increases
- Quantity demanded remains constant regardless of price
At a price of Php 25, what is the quantity demanded according to the market demand schedule for sweet potato?
At a price of Php 25, what is the quantity demanded according to the market demand schedule for sweet potato?
- 4 pieces
- 36 pieces
- 20 pieces (correct)
- 0 pieces
If the demand curve for a commodity shifts to the left, what does this indicate?
If the demand curve for a commodity shifts to the left, what does this indicate?
How does the market demand curve represent the relationship between price and quantity demanded?
How does the market demand curve represent the relationship between price and quantity demanded?
What happens to the quantity demanded of sweet potatoes when the price decreases from Php 30 to Php 29?
What happens to the quantity demanded of sweet potatoes when the price decreases from Php 30 to Php 29?
Which of the following statements best describes price elasticity of demand?
Which of the following statements best describes price elasticity of demand?
Which of the following is NOT a characteristic associated with a demand curve?
Which of the following is NOT a characteristic associated with a demand curve?
What happens to the equilibrium price when demand increases while supply remains constant?
What happens to the equilibrium price when demand increases while supply remains constant?
Which of the following factors is most likely to shift the demand curve to the right?
Which of the following factors is most likely to shift the demand curve to the right?
How does the law of demand describe the relationship between price and quantity demanded?
How does the law of demand describe the relationship between price and quantity demanded?
What best describes price elasticity of demand?
What best describes price elasticity of demand?
In the context of market demand schedules, what does a downward-sloping demand curve indicate?
In the context of market demand schedules, what does a downward-sloping demand curve indicate?
What is the substitution effect in economics?
What is the substitution effect in economics?
How would an increase in production costs likely affect supply in a competitive market?
How would an increase in production costs likely affect supply in a competitive market?
Which market type primarily involves the trading of financial assets like stocks and bonds?
Which market type primarily involves the trading of financial assets like stocks and bonds?
What is the equilibrium price based on the given demand and supply functions?
What is the equilibrium price based on the given demand and supply functions?
At the equilibrium price of 24.60 pesos, what is the equilibrium quantity?
At the equilibrium price of 24.60 pesos, what is the equilibrium quantity?
Which statement correctly describes the relationship of Qd and Qs at market equilibrium?
Which statement correctly describes the relationship of Qd and Qs at market equilibrium?
In the demand schedule provided, which price corresponds to a quantity demanded of 36 kilos?
In the demand schedule provided, which price corresponds to a quantity demanded of 36 kilos?
What does the downward slope of the demand curve represent?
What does the downward slope of the demand curve represent?
Study Notes
Market Types
- Markets facilitate interactions between buyers and sellers for trading goods and services.
- Goods market is the primary type, focusing on consumer goods purchases.
- Labor market connects workers seeking jobs with employers looking to hire talent.
- Financial markets trade securities, including the stock market and various other sub-markets.
Financial Markets Examples
- Interbank market allows transactions between banks.
- Stock Exchange enables the buying and selling of shares in companies.
- Money Market involves short-term loan trades among financial institutions.
- Bond Market is where investors purchase debt securities.
- Foreign Exchange market facilitates currency conversion.
Demand Insights
- Demand reflects a consumer's willingness to buy goods at specific prices.
- Income effect describes how price changes impact consumers' purchasing power.
- Substitution effect highlights demand shifts toward cheaper alternatives when prices rise.
Law of Demand
- Inverse correlation exists: as prices increase, quantity demanded decreases.
- Low prices encourage higher consumer demand.
- Ceteris paribus means factors other than price are held constant when analyzing demand.
Non-Price Determinants of Demand
- Changes in demand can stem from alterations in income, consumer tastes, future price expectations, related goods' prices, and population size.
Demand Schedule
- A demand schedule demonstrates the relationship between price and quantity demanded, typically represented in a tabular format.
Demand Function
- A function expressing quantity demanded (Qd) based on price (P) is Qd = 120 – 4P, signifying an inverse relationship.
Market Demand Schedule for Sweet Potato
- Illustrates varying price points connected to quantity demanded, from zero at 30.00 Php to 36 pieces at 21.00 Php.
Demand Curve
- Graphically illustrates the relationship between price (P) and quantity demanded (Qd) for a specific good.
Quantity Demanded Changes
- Change in quantity demanded occurs due to price adjustments, causing movement along the demand curve.
Change in Demand
- A shift in demand occurs due to factors other than price, resulting in a new demand curve placement.
Supply Definition
- Supply is defined as the amount of goods sellers are willing to offer at various price points.
Market Equilibrium
- Equilibrium occurs when quantity demanded (Qd) equals quantity supplied (Qs).
Market Equilibrium Schedule for Sweet Potato
- Highlights equilibrium points for prices and quantities ranging from 0 Qd at 30.00 Php to 36 Qd at 21.00 Php.
Equilibrium Price and Quantity Calculation
- Simultaneous solution of demand (Qd = 120 – 4P) and supply (Qs = -126 + 6P) equations yields equilibrium price (P) and quantity (Q).
Supply and Demand Graphs
- Graphical representation of demand and supply curves illustrates equilibrium price and quantity visually for analytical purposes.
Practice Computation
- Tasks include computing demand and supply schedules, graphing curves, and determining equilibrium metrics.
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