ECON 2100 The Global Economy Exam 1 with precise ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
detailed answers ||\\//||
Economics - correct answer✔✔the study of how people and societies use limited resources ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
to satisfy unlimited wants; the management of scarcity and choice
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Marginalism - correct answer✔✔the process of analyzing the additional or incremental costs ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
or benefits arising from a choice or decision
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Macroeconomics - correct answer✔✔the study of economy-wide phenomena, including ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
inflation, unemployment, and economic growth ||\\//|| ||\\//|| ||\\//|| ||\\//||
Opportunity cost - correct answer✔✔the cost of the next best alternative use of money, ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
time, or resources when one choice is made rather than another
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Microeconomics - correct answer✔✔the study of how households and firms make decisions ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
and how they interact in markets
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Supply and demand - correct answer✔✔an economic concept that states that the price of a
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good rises and falls depending on how many people want it (demand) and depending on
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how much of the good is available (supply)
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Markets - correct answer✔✔a place (physical or digital) that brings buyers and sellers
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together to exchange goods and services ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
Competitive market - correct answer✔✔when large numbers of producers compete with ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
each other to satisfy the wants and needs of a large number of consumers. In a competitive
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, market no single producer, or group of producers, and no single consumer, or group of
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consumers, can dictate how the market operates ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
Law of demand - correct answer✔✔the law that dictates that consumers buy more of a
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good when its price decreases and less when its price increases
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Demand curve - correct answer✔✔a graph of the relationship between the price of a good
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and the quantity demanded
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Change in quantity demanded - correct answer✔✔movement along the demand curve that
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shows a change in the quantity of the product purchased in response to a change in price
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Change in demand - correct answer✔✔people are willing to buy different amounts of the
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product at the same price ||\\//|| ||\\//|| ||\\//|| ||\\//||
Demand-side shift factors - correct answer✔✔1. change in income 2. change in price of ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
related goods and services 3. change in consumer preferences 4. change in the number of
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consumers 5. expectation ||\\//|| ||\\//||
Normal goods - correct answer✔✔Goods for which demand goes up when income is higher
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and for which demand goes down when income is lower
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Inferior goods - correct answer✔✔Goods for which demand tends to fall when income rises
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Complements - correct answer✔✔Goods and/or services that are used together ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
Substitutes - correct answer✔✔Goods and services that can be used for the same purpose
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detailed answers ||\\//||
Economics - correct answer✔✔the study of how people and societies use limited resources ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
to satisfy unlimited wants; the management of scarcity and choice
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Marginalism - correct answer✔✔the process of analyzing the additional or incremental costs ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
or benefits arising from a choice or decision
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Macroeconomics - correct answer✔✔the study of economy-wide phenomena, including ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
inflation, unemployment, and economic growth ||\\//|| ||\\//|| ||\\//|| ||\\//||
Opportunity cost - correct answer✔✔the cost of the next best alternative use of money, ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
time, or resources when one choice is made rather than another
||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
Microeconomics - correct answer✔✔the study of how households and firms make decisions ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
and how they interact in markets
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Supply and demand - correct answer✔✔an economic concept that states that the price of a
||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
good rises and falls depending on how many people want it (demand) and depending on
||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
how much of the good is available (supply)
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Markets - correct answer✔✔a place (physical or digital) that brings buyers and sellers
||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
together to exchange goods and services ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
Competitive market - correct answer✔✔when large numbers of producers compete with ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
each other to satisfy the wants and needs of a large number of consumers. In a competitive
||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
, market no single producer, or group of producers, and no single consumer, or group of
||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
consumers, can dictate how the market operates ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
Law of demand - correct answer✔✔the law that dictates that consumers buy more of a
||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
good when its price decreases and less when its price increases
||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
Demand curve - correct answer✔✔a graph of the relationship between the price of a good
||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
and the quantity demanded
||\\//|| ||\\//|| ||\\//||
Change in quantity demanded - correct answer✔✔movement along the demand curve that
||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
shows a change in the quantity of the product purchased in response to a change in price
||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
Change in demand - correct answer✔✔people are willing to buy different amounts of the
||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
product at the same price ||\\//|| ||\\//|| ||\\//|| ||\\//||
Demand-side shift factors - correct answer✔✔1. change in income 2. change in price of ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
related goods and services 3. change in consumer preferences 4. change in the number of
||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
consumers 5. expectation ||\\//|| ||\\//||
Normal goods - correct answer✔✔Goods for which demand goes up when income is higher
||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
and for which demand goes down when income is lower
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Inferior goods - correct answer✔✔Goods for which demand tends to fall when income rises
||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
Complements - correct answer✔✔Goods and/or services that are used together ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
Substitutes - correct answer✔✔Goods and services that can be used for the same purpose
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