ECON2150 Test Practice Questions with Verified
100% Correct Answers
exogenous variables - ✔✔Variables that have values taken as given in the analysis
(Y=f(x) if x is given to use then it is exogenous variable. When we use x and get the value
of y it is called endogenous variable.)
endogenous variables - ✔✔Variables that have values determined as a result of the
model's workings
6 restraints - ✔✔Time,
Budget,
Other Resources,
Technical Capabilities,
The Marketplace,
Rules Regulations and Laws,
behaviour can be modelled as - ✔✔optimizing the objective function, subject to
various constraints.
constraints - ✔✔are whatever limits is placed on the resources available to the agent.
marginal impact - ✔✔of a change in the exogenous variable is the incremental impact
of the last unit of the exogenous variable on the endogenous variable. important
because decisions are made at margin to find optimal choioce.
, Ex. y=f(x) where x is exogenous (given to us) and get y which is endogenous. Looking at
the impact of x on y is the marginal impact. For example if change in x is 1 then the
change in y shows the marginal impact. Lets say if change in x=2 then the marginal
impact has to be found by doing change in y/change in x because we want change of
each individual unit. If the change is small for x so close to 0 instead of it being triangle x
it will be dx and the corresponding change in y is dy, now the marginal function is dy/dx.
equilibrium analysiscomp - ✔✔an analysis of a system in a state that will continue
indefinitely as long as the exogenous factors remain unchanged.
Comparative statics analysis - ✔✔compares the equilibrium state of a system before
a change in the exogenous variables to the equilibrium state after the change.
Positive analysis - ✔✔Is an analysis that attempts to explain how an economic system
works or to predict how it will change over time
Normative analysis - ✔✔Is an analysis of what should be done
Three main type of analytical tools we will use to investigate our microeconomic
models: - ✔✔1.Contrained optimizations
-> inc. marginal analysis
2.Equilibrium analysis (intersection of curves find using graphs and some math)
3. Comparitive statics (after changing the exogenous variables the model changes and
so we compare those different models)
"How would a manager hire the most possible workers on a budget of $100?"
Which variables are endogenous and which are exogenous? - ✔✔The variables are:
number of workers(endogenous) and the budget(100, exogenous)
100% Correct Answers
exogenous variables - ✔✔Variables that have values taken as given in the analysis
(Y=f(x) if x is given to use then it is exogenous variable. When we use x and get the value
of y it is called endogenous variable.)
endogenous variables - ✔✔Variables that have values determined as a result of the
model's workings
6 restraints - ✔✔Time,
Budget,
Other Resources,
Technical Capabilities,
The Marketplace,
Rules Regulations and Laws,
behaviour can be modelled as - ✔✔optimizing the objective function, subject to
various constraints.
constraints - ✔✔are whatever limits is placed on the resources available to the agent.
marginal impact - ✔✔of a change in the exogenous variable is the incremental impact
of the last unit of the exogenous variable on the endogenous variable. important
because decisions are made at margin to find optimal choioce.
, Ex. y=f(x) where x is exogenous (given to us) and get y which is endogenous. Looking at
the impact of x on y is the marginal impact. For example if change in x is 1 then the
change in y shows the marginal impact. Lets say if change in x=2 then the marginal
impact has to be found by doing change in y/change in x because we want change of
each individual unit. If the change is small for x so close to 0 instead of it being triangle x
it will be dx and the corresponding change in y is dy, now the marginal function is dy/dx.
equilibrium analysiscomp - ✔✔an analysis of a system in a state that will continue
indefinitely as long as the exogenous factors remain unchanged.
Comparative statics analysis - ✔✔compares the equilibrium state of a system before
a change in the exogenous variables to the equilibrium state after the change.
Positive analysis - ✔✔Is an analysis that attempts to explain how an economic system
works or to predict how it will change over time
Normative analysis - ✔✔Is an analysis of what should be done
Three main type of analytical tools we will use to investigate our microeconomic
models: - ✔✔1.Contrained optimizations
-> inc. marginal analysis
2.Equilibrium analysis (intersection of curves find using graphs and some math)
3. Comparitive statics (after changing the exogenous variables the model changes and
so we compare those different models)
"How would a manager hire the most possible workers on a budget of $100?"
Which variables are endogenous and which are exogenous? - ✔✔The variables are:
number of workers(endogenous) and the budget(100, exogenous)
