ECON 1001 USYD EXAM QUESTIONS AND ANSWERS SOLVED CORRECTLY LATEST UPDATE
2025-2026
explicit opportunity costs - Answers costs that involve direct payment (eg. the cost of going to
university)
implicit opportunity costs - Answers opportunities that that do not have an explicit cost (eg. the
loss of possible income by coming to university instead)
marginal benefit (MB) - Answers the benefit of an extra unit consumed, fo the consumer.
Consumers will stop buying a good when MB = P
marginal cost (MC) - Answers the additional cost of buying an extra unit
ceteris paribus - Answers all other things held constant, to examine only one factor at a time
causation - Answers when a change in one variable causes a change in another variable
correlation - Answers when two or more factors are observed to be moving in the opposite
direction together
production possibility frontier - Answers illustrates the trade-offs facing an economy that
produces only two goods. It shows the maximum quantity of one good that can be produced for
any given quantity produced of the other
absolute advantage - Answers the ability of a party to produce a good or service more efficiently
than its competitors
comparative advantage - Answers the ability of a party to produce a good or service at a lower
opportunity cost than its trading partners
specialisation - Answers where a party focuses on the production of a limited scope of goods to
gain a greater degree of efficiency
factors influencing the level of demand - Answers income, taxes, expectations, price of
substitutes
short run - Answers the period of time during which at least one of a firm's inputs is fixed
long run - Answers the time period in which all inputs can be varied
production functions (cobb-douglas function) - Answers shows the relationship between a
variety of inputs used and the maximum quantity of outputs produced
marginal product (MP) - Answers the change in output when one or more extra inputs is used. It
is generally diminishing
fixed costs (FC) - Answers costs that do not vary with output. When output is zero, all costs are
2025-2026
explicit opportunity costs - Answers costs that involve direct payment (eg. the cost of going to
university)
implicit opportunity costs - Answers opportunities that that do not have an explicit cost (eg. the
loss of possible income by coming to university instead)
marginal benefit (MB) - Answers the benefit of an extra unit consumed, fo the consumer.
Consumers will stop buying a good when MB = P
marginal cost (MC) - Answers the additional cost of buying an extra unit
ceteris paribus - Answers all other things held constant, to examine only one factor at a time
causation - Answers when a change in one variable causes a change in another variable
correlation - Answers when two or more factors are observed to be moving in the opposite
direction together
production possibility frontier - Answers illustrates the trade-offs facing an economy that
produces only two goods. It shows the maximum quantity of one good that can be produced for
any given quantity produced of the other
absolute advantage - Answers the ability of a party to produce a good or service more efficiently
than its competitors
comparative advantage - Answers the ability of a party to produce a good or service at a lower
opportunity cost than its trading partners
specialisation - Answers where a party focuses on the production of a limited scope of goods to
gain a greater degree of efficiency
factors influencing the level of demand - Answers income, taxes, expectations, price of
substitutes
short run - Answers the period of time during which at least one of a firm's inputs is fixed
long run - Answers the time period in which all inputs can be varied
production functions (cobb-douglas function) - Answers shows the relationship between a
variety of inputs used and the maximum quantity of outputs produced
marginal product (MP) - Answers the change in output when one or more extra inputs is used. It
is generally diminishing
fixed costs (FC) - Answers costs that do not vary with output. When output is zero, all costs are
