Introduction to Economics 1 Dersi 2. Ünite Sorularla Öğrenelim

Define market demand.

Market demand is the sum of all the quantities of a product demanded per period by all the buyers in the market.

Define normal goods.

Normal goods are the goods for which the demand increases when income is higher and decreases when income is lower.

When does a movement along the demand curve occur?

A movement along the demand curve occurs when the price of the good changes. Because a change in price causes quantity demanded to change in opposite direction. A change or shift of a demand curve occurs when the other factors, other than the price, such as the income changes, happens. Any change that increases the quantity that buyers wish to buy at a given price causes a shift of the demand curve to the right. 

Define the term market and provide different examples.

In economics, a market is where consumers and producers meet to carry out an economic transaction. 

-The Grand Bazaar in Istanbul

-Weekly neighborhood market

-Alibaba

Define the term equilibrium.

Equilibrium is a situation in which the supply and demand equals to each other.

Define the term supply curve.

A supply curve is a graph which illustrates how much of a good a firm is willing to sell at different prices.

In the Ramadan Holiday, the demand and supply of candy increase seasonally. What will happen to the equilibrium price and quantity?

When the demand and supply of candy increase seasonally during the Ramadan, what happens to the equilibrium price is uncertain but the equilibrium quantity will certainly be higher as a result of the shift of both curves to the right. Whether the price will increase or decrease will be determined by the relative changes in the demand and supply curves. If the change in demand is more than the change in supply, we can say that the equilibrium price goes up.

Explain the conditions required for perfect competition.

• The good or service being exchanged is the same across all sellers; the quality or the characteristics of it do not change from one seller to another.

• There is a high number of potential buyers and sellers of this good; and all act independently from each other

• Entry of new sellers into the market is not restricted by any means.

• Buyers and sellers readily and freely have access to information with regards to the prices at which other buyers and sellers are exchanging the good.

What is a Ceteris Paribus?

Ceteris Paribus is a Latin phrase, which means “other things being equal.” It is used in economics to state that all variables other than the one studied are assumed to be constant or fixed.

What is a competitive market?

A competitive market is a type of market in which there are many buyers and sellers so that the effect of each one on market price is negligible.

In a particular market, such as house rentals, if supply is fixed,  the price will be determined by what? 

Demand curve.

Define the term 'demand curve'. 

A demand curve is a graph that illustrates how much of a specific good an individual or household would be willing to buy at different prices.

Define monopoly and provide examples from Turkish context.

A monopoly is a market where there is only one seller of the product and this seller sets the price alone.

-Türk Telekom

What is a demand schedule?

A demand schedule is a table that shows the relationship between the price and quantity demanded of a product.

Briefly explain the term 'inferior goods'.

Inferior goods are the goods for which the demand falls when the income goes up.

Explain the term 'profit' briefly.

Profit is the difference between the total revenue and total cost. 

Briefly explain substitute goods.

If two products are substitutes for each other, a change in the price of one product will change the demand for the other product in the opposite direction. For example, if the price of chicken goes down, the demand for beef will shift down to the left.

When does a shortage occur?

When there is an Excess demand.

Briefly mention about the law of supply.

The law of supply refers the fact that there exist a positive relationship between the price and the quantity supplied of a particular good. It indicates that when the price of a good goes up, the sellers’ quantity supplied also goes up, and vice-versa.

Explain the law of demand.

The law of demand states that, other things equal, when the price of a good rises, the quantity demanded of that good falls.