Topics in EconomicsAdvantages of Inflation Disadvantages of Inflation Concept of Inflation in Economics Scheme of work for Economics, SS1, First Term Scheme of work for Economics, SS1, Second Term Scheme of Work for Economics, SS1, Third Term Functions of the Wholesaler Advantages and Disadvantages of the Wholesaler Wholesale Market: Who is a Wholesaler? Characteristics of the Wholesaler Retail Market: Who is a Retailer and Examples of Retailers Market: Types of Market Market - What is a Market in Economics? Elasticity of Supply: Types of Supply Elasticity Supply Elasticity: Elasticity of Supply explained Demand Schedule - Types of Demand Schedule Demand: What is Demand? Law of Demand Concept and Types of Cost Supply, Supply Curve and Law of Supply What is a Black Market, Its advantages and disadvantages
Academic Questions in Economics
Concerning demand curve, which of the following statement is incorrect?
A. It is a graphical represention of a table showing the price of commodities and quantity demanded
B. It can be an individual demand curve
C. The x-axis shows the price of commodities
D. The price and quantity demanded are expressed on different axis of the graph
E. It can be a market demand curve
F. All the options are correct
A table that shows the price of a commodity and the quantity demanded is termed _____.
A. Price table
B. Demand table
C. Demanded-price table
D. Demand preference table
E. Demand graph
F. Demand schedule
The concept of Ceteris Paribus Assumption in economics states that _____.
A. Supply and Demand are antagonistic
B. When given two choice of similar products with the same price (assuming all other factors are constant), you will prefer to buy that with a lower price
C. Supply and Demand are agonistic
D. When given two choice of dissimilar products with the same price (assuming all other factors are constant), you will prefer to buy that which you need most
E. When given two choice of similar products with the different prices (assuming all other factors are constant), you will prefer to buy that with a lower price
F. When given two choice of dissimilar products with the different prices (assuming all other factors are constant), you will prefer to buy that with a lower price
The willingness of a person to buy a specific quantity of goods or services at a given price and time is termed _____.
A. Scale of preference
B. Economies of scale
C. Opportunity Cost
Costs generally treated as expenses in business are termed _____.
A. Fixed cost
B. Variable cost
C. Sunk cost
D. Direct cost
E. Private cost
F. Outlay cost
When an entrepreneur pays cash (money) for materials needed for production, such money is termed as an _____ cost.
A government mandated maximum price for goods or services is termed _____.
A. Price height
B. Price maxima
C. Price ceiling
D. Price level
E. Price finale
F. Price top-zone
The quantity of supplied services or goods will increase as the price increases and they will decrease as the price decreases provided all other factors remain constant.
The above statement is attributed to the _____.
A. Law of price increase and price decrease
B. Law of product quantity
C. Law of demand
D. Law of supply
E. Law of quantity demanded and supplied in relation to price
F. Law of purchases on services and goods
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Demand is one of the forces that govern the market system. The other is supply.
Price is another important factor that is always determined by demand and supply.
Everyone is always in demand for something at various points in their everyday life. For instance, you probably had demanded for data by your network provider before you could read this article on LEN ACADEMY.
By definition, Demand is the willingness of a person, buyer or consumer to buy a specific quantity of goods or service at a given price and time.
Various professors have given their own version for the definition of demand. Common to their definitions is the ideology that: 'There is a desire corroborated or supported by the ability and willingness of a buyer to pay for a particular product at a specific price and time'.
Below are some definitions of demand from the perspective of some notable professors:
The demand for goods is a schedule of the amounts that buyers would be willing to purchase at all possible prices at any one instant of a time.
Demand is the various quantities of goods that would be purchased per time period at different prices in a given market.
The demand for anything, at a given price is the amount of it which will be bought per unit of time at the price.
From the above definitions, we can infer that the definition of demand is referenced to three major factors. These are:
Note: Demand (sometimes called Effective Demand) isn’t the same as desire, want or need. This is true because the desired (which could be wanted or needed) goods and services may not be bought, especially due to the limitation by price and the availability of money at that point in time.
From the above explanation, we can therefore state that effective demand is the ability to pay for a product.
Another term that exists is Latent Demand and Derived Demand.
Latent Demand is when the buyer intends to buy goods or services but lacks the purchasing power; and as a result cannot buy the intended goods or services. Think of it as an unaccomplished demand.
Derived demand is a term used when the demand of a product is required because a related product had been purchased. For instance, If product A is related or connected to product B, the demand of product A will likely result to the demand of product B.
In the above instance, Product A could be mobile phones while product B may be SIM cards.
The demand for a specific product in the market is governed by the Law of Demand.
The Law of demand states that an increase in price will result to a decrease in the demand of a product while a decrease in price will result to an increase in the demand of a product, as far as other factors remains constant.
Note: The law of demand holds true under the following assumptions:
Below is a graph that shows the Law of Demand for Wheat:
The Law of Demand remains valid in the sense that:
When given the choice of 2 similar products with the same price; (assuming all other factors remain constant or the same), you will prefer/choose to buy that with a lower price. This is the concept of Ceteris Paribus Assumption.
According to the market structure, the buyers make up the demand side for a product while the seller constitutes the supply side of products.
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Alfred Ajibola is a Medical Biochemist, a passionate Academician with over 7 years of experience, a Versatile Writer, a Web Developer, a Cisco Certified Network Associate and a Cisco CyberOps Associate.
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Amazing facts in Economics
NOTABLE POINTS IN Economics
A Black market is said to take place when there is illegal buying and selling of goods and services.
Black markets usually take place outside the government's rader and without government's knowledge so as to avoid tax or any other government regulations.
Black market presents the avenue for government prohibited goods like hard drugs, war weapons and firearms to be bought by criminals.
A black market can also occur on the web for cyber criminals or those who are involved in computer hacking. To achieve their malicious aim, these individuals will go into the dark web and purchase or rent their respective hacking tools for a fee. Normally, payments are made in crypto currencies.
However, a black market isn't generally considered as bad. Infact, it has its advantages and disadvantages.
Below are some advantages of black market:
Goods and services are sold at a cheaper price.
It helps some people make plenty of money.
The illegal sales of human organs, for example, the sale of human kidneys have aided in saving some lives.
Some people actually depend on black market for their daily bread.
Some of the proceeds from black market may been utilized towards the economic growth of a Nation. For instance, schools and hospitals had been from money made from black market.
The law of supply states that:
The quantity of the supplied services or goods will increase as the price increases and they will decrease as the price decreases provided all other factors remain constant.
These constant factors are very important when stating the supply law. They include:
The price of Input resources
The kind of technology used during production
The number of suppliers
The number of buyers; and so on.
A graph that shows the relationship between the price of a product or service, and its quantity supplied is the supply curve.
Supply curve can be defined as a graphical representation of the direct relationship between the prices of goods and services and the quantity supplied (of such goods and services) within a particular period of time provided all other factors remain constant.
Consider the table below:
Needs / Wants
The above table shows us what a scale of preference would look like.
A scale of preference can be defined as the list of a person's needs or wants written in an order of importance.
You will observe that the person puts his most important needs or wants at the top of the list. Further down the list are his less important needs.
Now, let's imagine that this individual has 170,000 Naira to spend. According to the above scale of preference, the followings can be deduced;
A phone will be considered to be the most important; and it costs 50,000. He buys the phone.
A console game according to this person is next in importance; and it costs 120,000. He buys the console game.
Another question worth asking is:
What happens to his other needs?
This is where the term 'Opportinity Cost comes into play.
Scale of Preference can be defined as the list of a person's needs or wants written in an order of importance. 📜✍️
When you have a limited amount of money and could only buy some of the items on your list (the top items on the list); then the remaining items that you didn't buy will be generally considered as your opportunity cost.
Opportunity cost can be defined as the value of the best alternative that a person could have achieved or bought but couldn't achieve after the best choice had been achieved.
Opportunity cost are of two types. They are: