ECON 2110 Final Hanssen Questions And Answers

ECON 2110 Final Hanssen q q q


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ECON 2110 Final Hanssen Questions And Answers

1. Normative Statement: Opinions that are hard to verify or disprove. "We should h
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ave a higher median income"
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2. Positive Statement: empirically provable (or disprovable facts). "the median in-
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qcome in South Carolina $54,654"
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3. Marginal Cost: the cost of an additional unit of something. same as the opportu-
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qnity cost
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4. marginal benefit: benefit of an additional unit
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5. scarcity: unlimited wants and limited resources; makes us make tradeoffs
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6. law of demand: when the price goes up, demand goes down; when the price go
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es down, demand goes up
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7. quantity demanded: the amount of a good that buyers are willing and able to pu
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rchase
8. determinants of demand: 1. substitutes and complements q q q q q q


2. income
3. population
4. tastes and preferences
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5. expectations
9. Law of Supply: as price increases, quantity supplied increases
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10. determinants of supply: 1. inputs q q q q


2. technological change q


3. expectations
4. market size q


11. Equilibrium: where supply and demand meet. no more trades that make both p
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arties better off.
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12. elasticty: % in quantity over % change in price.
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13. elastic: people buy a lot less with a small change in price. more substitutes make it
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more q. the faster opportunity costs rise, the more
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14. inelastic: people don't respond to price changes much.
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15. E: Visiting NYC for one night, Lisa chooses to go to a Broadway show rather than to
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, ECON 2110 Final Hanssen q q q


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a movie. Thinking like economists, we can conclude that
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a. the opportunity cost of Lisa's going to the movie includes more than the monetary pri
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ce. b. Lisa gets a larger surplus from the Broadway show than from the movie.
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c. Lisa gets higher benefits from the Broadway show than from the movie
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d. All of the above. q q q


e. Just a and b. q q q


16. B: You receive an internship offer from a well-
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known firm that will require you to spend the summer in Seattle. The internship prospe
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ct is very exciting, but you had looked forward to spending the summer on the beach w
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here your sweetheart will be working as a lifeguard. Which of the following would redu
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ce the opportunity cost of
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