ECO 111 Midterm questions and
answers rated A+
Opportunity Cost - correct answer ✔✔what you give up in order to be doing something
What does a linear PPF mean? - correct answer ✔✔opportunity cost is constant
Trade-Offs - correct answer ✔✔alternatives you face if you decide to do one thing rather than
another
Absolute Advantage - correct answer ✔✔producing a good with less resources than another
(lower costs & higher profit)
Comparative Advantage - correct answer ✔✔producing a good at lower opportunity cost than
someone else
Demand Curve - correct answer ✔✔shows the relationship between the price of a good & the
amount of a good that buyers are willing and able to purchase at various prices
Quantity Demanded (QD) - correct answer ✔✔the amount of a good buyers are willing and able
to purchase at a given price
Law of Demand - correct answer ✔✔quantity demanded falls when price rises
Factors that Determine Demand - correct answer ✔✔price of a related good, income of
consumers, tastes of consumers, number of consumers, consumer expectation
, Supply Curve - correct answer ✔✔shows the relationship between the price of a good & the
amount sellers are willing and able to supply at various prices
Quantity Supplied - correct answer ✔✔the amount of a good sellers are willing and able to
supply at a given price
Law of Supply - correct answer ✔✔quantity supplied increases when price rises
Factors that Determine Supply - correct answer ✔✔price of inputs, production technology,
number of producers, expectations of producers
Demand curve shifts ________ when positive - correct answer ✔✔right
Supply curve shifts __________ when positive - correct answer ✔✔left
Market Equilibrium - correct answer ✔✔occurs at the price when quantity demanded =
quantity supplied
What happens when there is a shortage? - correct answer ✔✔- current price must be lower
than equilibrium price
- expect buyers to offer higher prices (if they want the product that badly)
What kind of pressure is exerted when there is a surplus? - correct answer ✔✔Downward
What kind of pressure is exerted when there is a shortage? - correct answer ✔✔Upward
Price Elasticity of Demand - correct answer ✔✔measures responsiveness of consumers to
changes in price
answers rated A+
Opportunity Cost - correct answer ✔✔what you give up in order to be doing something
What does a linear PPF mean? - correct answer ✔✔opportunity cost is constant
Trade-Offs - correct answer ✔✔alternatives you face if you decide to do one thing rather than
another
Absolute Advantage - correct answer ✔✔producing a good with less resources than another
(lower costs & higher profit)
Comparative Advantage - correct answer ✔✔producing a good at lower opportunity cost than
someone else
Demand Curve - correct answer ✔✔shows the relationship between the price of a good & the
amount of a good that buyers are willing and able to purchase at various prices
Quantity Demanded (QD) - correct answer ✔✔the amount of a good buyers are willing and able
to purchase at a given price
Law of Demand - correct answer ✔✔quantity demanded falls when price rises
Factors that Determine Demand - correct answer ✔✔price of a related good, income of
consumers, tastes of consumers, number of consumers, consumer expectation
, Supply Curve - correct answer ✔✔shows the relationship between the price of a good & the
amount sellers are willing and able to supply at various prices
Quantity Supplied - correct answer ✔✔the amount of a good sellers are willing and able to
supply at a given price
Law of Supply - correct answer ✔✔quantity supplied increases when price rises
Factors that Determine Supply - correct answer ✔✔price of inputs, production technology,
number of producers, expectations of producers
Demand curve shifts ________ when positive - correct answer ✔✔right
Supply curve shifts __________ when positive - correct answer ✔✔left
Market Equilibrium - correct answer ✔✔occurs at the price when quantity demanded =
quantity supplied
What happens when there is a shortage? - correct answer ✔✔- current price must be lower
than equilibrium price
- expect buyers to offer higher prices (if they want the product that badly)
What kind of pressure is exerted when there is a surplus? - correct answer ✔✔Downward
What kind of pressure is exerted when there is a shortage? - correct answer ✔✔Upward
Price Elasticity of Demand - correct answer ✔✔measures responsiveness of consumers to
changes in price
