ECON Exam #1 Correct Questions And
Answers
Opportunity Cost Correct Answers the cost of a choice is the value of the opportunities
lost
Marginal Analysis Correct Answers An examination of the additional benefits of an
activity compared to the additional costs of that activity
Microeconomics Correct Answers The practice of household/firm economics
Macroeconomics Correct Answers The practice of large-scale economics
Quantity Demanded Correct Answers describes the quantity that buyers desire to
purchase given the price and all other factors that affect purchase decisions
Demand Correct Answers describes the relationship between price and quantity
demanded over some time period
Reading Demand curves horizontally Correct Answers Move horizontally to the demand
curve to find the highest Qd consumers would be willing to purchase at that price
Reading Demand curves vertically Correct Answers Move vertically to the demand line
to find the highest price that consumers would be willing to pay to purchase that quantity
Consumer Surplus Correct Answers Measures differences between price paid and max.
willingness-to-pay for each unit traded, the area below Demand and above the price
Price changes cause movement along Demand Correct Answers Price changes DO
NOT change demand and DO NOT shift demand curves
1 Shift Factors of Demand Correct Answers 1 Changes in tastes
2 Shift Factors of Demand Correct Answers 2 Changes in income (normal vs. inferior)
3 Shift Factors of Demand Correct Answers 3 Changes in population
4 Shift Factors of Demand Correct Answers 4 Changes in prices of substitutes
5 Shift Factors of Demand Correct Answers 5 Changes in prices of complements
6 Shift Factors of Demand Correct Answers 6 Changes in expectations
Answers
Opportunity Cost Correct Answers the cost of a choice is the value of the opportunities
lost
Marginal Analysis Correct Answers An examination of the additional benefits of an
activity compared to the additional costs of that activity
Microeconomics Correct Answers The practice of household/firm economics
Macroeconomics Correct Answers The practice of large-scale economics
Quantity Demanded Correct Answers describes the quantity that buyers desire to
purchase given the price and all other factors that affect purchase decisions
Demand Correct Answers describes the relationship between price and quantity
demanded over some time period
Reading Demand curves horizontally Correct Answers Move horizontally to the demand
curve to find the highest Qd consumers would be willing to purchase at that price
Reading Demand curves vertically Correct Answers Move vertically to the demand line
to find the highest price that consumers would be willing to pay to purchase that quantity
Consumer Surplus Correct Answers Measures differences between price paid and max.
willingness-to-pay for each unit traded, the area below Demand and above the price
Price changes cause movement along Demand Correct Answers Price changes DO
NOT change demand and DO NOT shift demand curves
1 Shift Factors of Demand Correct Answers 1 Changes in tastes
2 Shift Factors of Demand Correct Answers 2 Changes in income (normal vs. inferior)
3 Shift Factors of Demand Correct Answers 3 Changes in population
4 Shift Factors of Demand Correct Answers 4 Changes in prices of substitutes
5 Shift Factors of Demand Correct Answers 5 Changes in prices of complements
6 Shift Factors of Demand Correct Answers 6 Changes in expectations
