IVY SOFTWARE MBA PREPWORKS
FUNDAMENTALS OF ECONOMICS EXAM
◉ Opportunity Cose. Answer: What you give up to get something
◉ Production Possibilities Frontier. Answer: A model of a two- good
economy that shows how much the economy can produce using all
its factors of production effeciently
◉ Increasing Opportunity Cost. Answer: As more and more of an
economy's factors of production are employed in the production of a
good, the economy must sacrifice the production of other goods at
an increasing rate
◉ Absolute Advantage. Answer: One has the lowest production cost
relative with whom they're being compared
◉ Comparative Advantage. Answer: One has the lowest opportunity
cost relative with whom they're being compared
◉ Demand Schedule. Answer: A table showing the relationship
between price and the quantity of a good that buyers are willing to
buy
,◉ Demand Curve. Answer: A picture of the way an individual
responds to changing prices of a good
◉ Demand Function. Answer: A relationship between independent
demand variables, such as the price of good X and the price of a
substitute good Y, and the dependent variable, the quantity
demanded of good X.
◉ Law of Demand. Answer: As the price of a good increases, ceteris
paribus, the quantity demanded of the good decreases.
◉ Market Demand Curve. Answer: The horizontal summation of
individual demand curves yields the market demand curve.
◉ Market Demand Schedule. Answer: The market demand schedule
is a table that is calculated by summing up how many units of a good
buyers are willing to purchase at every market price.
◉ Price Elasticity of Demand. Answer: A measure of the relationship
between a percentage change in the market price of product and a
consequential percentage change in the quantity demanded of a
product
◉ Cross Price Elasticity of Demand. Answer: A measure of the
relationship between a percentage change in the market price of
, product X and a consequential percentage change in the quantity
demanded of product Y
◉ Income Elasticity of Deman. Answer: A measure of the
relationship between a percentage change in income and a
consequential percentage change in the quantity demanded of a
product.
◉ Supply Schedule. Answer: A table showing the relationship
between price and the quantity of a good that sellers are willing to
produce.
◉ Supply Curve. Answer: A picture of the way in which a producer
responds to changing market prices of a good.
◉ Supply Function. Answer: A relationship between independent
supply variables, such as the price of
inputs and technology, and the dependent variable, the quantity
supplied of a good.
◉ Law of Supply. Answer: As the price of a good increases, ceteris
paribus, the quantity supplied of the good increases.
◉ Market Supply Curve. Answer: The horizontal summation of
individual supply curves yields the market supply curve.
FUNDAMENTALS OF ECONOMICS EXAM
◉ Opportunity Cose. Answer: What you give up to get something
◉ Production Possibilities Frontier. Answer: A model of a two- good
economy that shows how much the economy can produce using all
its factors of production effeciently
◉ Increasing Opportunity Cost. Answer: As more and more of an
economy's factors of production are employed in the production of a
good, the economy must sacrifice the production of other goods at
an increasing rate
◉ Absolute Advantage. Answer: One has the lowest production cost
relative with whom they're being compared
◉ Comparative Advantage. Answer: One has the lowest opportunity
cost relative with whom they're being compared
◉ Demand Schedule. Answer: A table showing the relationship
between price and the quantity of a good that buyers are willing to
buy
,◉ Demand Curve. Answer: A picture of the way an individual
responds to changing prices of a good
◉ Demand Function. Answer: A relationship between independent
demand variables, such as the price of good X and the price of a
substitute good Y, and the dependent variable, the quantity
demanded of good X.
◉ Law of Demand. Answer: As the price of a good increases, ceteris
paribus, the quantity demanded of the good decreases.
◉ Market Demand Curve. Answer: The horizontal summation of
individual demand curves yields the market demand curve.
◉ Market Demand Schedule. Answer: The market demand schedule
is a table that is calculated by summing up how many units of a good
buyers are willing to purchase at every market price.
◉ Price Elasticity of Demand. Answer: A measure of the relationship
between a percentage change in the market price of product and a
consequential percentage change in the quantity demanded of a
product
◉ Cross Price Elasticity of Demand. Answer: A measure of the
relationship between a percentage change in the market price of
, product X and a consequential percentage change in the quantity
demanded of product Y
◉ Income Elasticity of Deman. Answer: A measure of the
relationship between a percentage change in income and a
consequential percentage change in the quantity demanded of a
product.
◉ Supply Schedule. Answer: A table showing the relationship
between price and the quantity of a good that sellers are willing to
produce.
◉ Supply Curve. Answer: A picture of the way in which a producer
responds to changing market prices of a good.
◉ Supply Function. Answer: A relationship between independent
supply variables, such as the price of
inputs and technology, and the dependent variable, the quantity
supplied of a good.
◉ Law of Supply. Answer: As the price of a good increases, ceteris
paribus, the quantity supplied of the good increases.
◉ Market Supply Curve. Answer: The horizontal summation of
individual supply curves yields the market supply curve.
