MACROECONOMICS FINAL PAPER FULL
QUESTIONS AND CORRECT ANSWERS
ALREADY PASSED
●● Tangible Assets
Answer: Real Estate, Equipment, and Cash (physical assets)
●● Intangible Assets
Answer: Patents, Goodwill, and Trademarks (lack physical substance)
●● Substitution effect
Answer: Economic rule stating that if two items satisfy the same need
and the price of one rises, people will buy the other.
●● Equilibrium price
Answer: The price at which the number of products that businesses are
willing to supply equals the amount of products that consumers are
willing to buy at a specific point in time.
●● Excess Supply
Answer: When quantity supplied is more than quantity demanded. The
formula for excess supply is: Supply - Demand = Excess Supply
,●● Reservation price
Answer: Maximum price that a customer is willing to pay for a good
●● Buyer's surplus
Answer: The difference between a buyer's reservation price (the price
they want to pay) and the actual price paid for a good or service
●● Seller's surplus
Answer: The difference between the price received by the seller and the
seller's reservation price
●● Total surplus
Answer: The difference between the buyer's reservation price and the
seller's reservation price. Consumer surplus + Producer surplus
●● Free market
Answer: A market with unrestricted trading of goods, where the prices of
goods are determined by supply and demand.
●● Traditional economic system
Answer: In a traditional economic system, the availability of resources is
based on inheritance. Goods are only produced for consumption and
surpluses do not occur. This type of economy is normally found in South
American, Asian, and African countries.
, ●● Command economic system
Answer: An economic system in which all factors of production are
owned and controlled by the government. Often referred to as a centrally
planned economic system. Example: Former Soviet Union.
●● Mixed market
Answer: Combines pure market and command.
Example: Japan
●● Law of Diminishing Marginal Utility
Answer: A law stating that as a person consumes additional units of a
good, eventually the utility gained from each additional unit of the good
decreases.
●● Law of Demand
Answer: A law stating that as the price of a product increases the
demand of that product decreases, while if the price of a product
decreases the demand for that product increases.
●● Law of Supply
Answer: The law that states that as the price of any good or service
increases, the quantity of that good or service will increase and vice
versa.
QUESTIONS AND CORRECT ANSWERS
ALREADY PASSED
●● Tangible Assets
Answer: Real Estate, Equipment, and Cash (physical assets)
●● Intangible Assets
Answer: Patents, Goodwill, and Trademarks (lack physical substance)
●● Substitution effect
Answer: Economic rule stating that if two items satisfy the same need
and the price of one rises, people will buy the other.
●● Equilibrium price
Answer: The price at which the number of products that businesses are
willing to supply equals the amount of products that consumers are
willing to buy at a specific point in time.
●● Excess Supply
Answer: When quantity supplied is more than quantity demanded. The
formula for excess supply is: Supply - Demand = Excess Supply
,●● Reservation price
Answer: Maximum price that a customer is willing to pay for a good
●● Buyer's surplus
Answer: The difference between a buyer's reservation price (the price
they want to pay) and the actual price paid for a good or service
●● Seller's surplus
Answer: The difference between the price received by the seller and the
seller's reservation price
●● Total surplus
Answer: The difference between the buyer's reservation price and the
seller's reservation price. Consumer surplus + Producer surplus
●● Free market
Answer: A market with unrestricted trading of goods, where the prices of
goods are determined by supply and demand.
●● Traditional economic system
Answer: In a traditional economic system, the availability of resources is
based on inheritance. Goods are only produced for consumption and
surpluses do not occur. This type of economy is normally found in South
American, Asian, and African countries.
, ●● Command economic system
Answer: An economic system in which all factors of production are
owned and controlled by the government. Often referred to as a centrally
planned economic system. Example: Former Soviet Union.
●● Mixed market
Answer: Combines pure market and command.
Example: Japan
●● Law of Diminishing Marginal Utility
Answer: A law stating that as a person consumes additional units of a
good, eventually the utility gained from each additional unit of the good
decreases.
●● Law of Demand
Answer: A law stating that as the price of a product increases the
demand of that product decreases, while if the price of a product
decreases the demand for that product increases.
●● Law of Supply
Answer: The law that states that as the price of any good or service
increases, the quantity of that good or service will increase and vice
versa.
