ECON 2105 Midterm 1 Questions and Answers | 2026
Update | 100% Correct\\pass!!
production possibilities frontier - ANSWER-moving along this reveals your opportunity
costs
marginal principle - ANSWER-determine what type of choice you face, weigh marginal
benefits against marginal costs, apply marginal principle iteratively until you eventually
decide against buying one more unit, then stop; think at the margin; decisions about
quantities are best made incrementally; you should break "how many" questions into
series of smaller marginal choices
four step process to estimate market demand - ANSWER-survey, for each price add up
total quantity demanded by all customers, scale up quantities to represent whole
market, plot total quantity demanded at each price
increase in demand - ANSWER-shift of demand curve to right
decrease in demand - ANSWER-shift of demand curve to left
interdependence principle - ANSWER-everything is connected; best choice depends on
many other factors beyond price; how different decisions depend on each other; your
best choice depends on your other choices, choices others make, developments in
other markets, and expectations about future; buyers best choice also depends on
many other factors beyond price
six factors that shift market demand curve - ANSWER-income, preferences, prices of
related goods, expectations, congestion and network effects, type and number of
buyers
increase in supply - ANSWER-shift of supply curve to right
decrease in supply - ANSWER-shift of supply curve to left
five factors that shift market supply curve - ANSWER-input prices, productivity and
technology, prices of related outputs, expectations, type and number of sellers
equilibrium - ANSWER-no shortage or surplus; point at which there is no tendency for
change
surplus - ANSWER-whenever price is above equilibrium price; when quantity demanded
is less than quantity supplied
Update | 100% Correct\\pass!!
production possibilities frontier - ANSWER-moving along this reveals your opportunity
costs
marginal principle - ANSWER-determine what type of choice you face, weigh marginal
benefits against marginal costs, apply marginal principle iteratively until you eventually
decide against buying one more unit, then stop; think at the margin; decisions about
quantities are best made incrementally; you should break "how many" questions into
series of smaller marginal choices
four step process to estimate market demand - ANSWER-survey, for each price add up
total quantity demanded by all customers, scale up quantities to represent whole
market, plot total quantity demanded at each price
increase in demand - ANSWER-shift of demand curve to right
decrease in demand - ANSWER-shift of demand curve to left
interdependence principle - ANSWER-everything is connected; best choice depends on
many other factors beyond price; how different decisions depend on each other; your
best choice depends on your other choices, choices others make, developments in
other markets, and expectations about future; buyers best choice also depends on
many other factors beyond price
six factors that shift market demand curve - ANSWER-income, preferences, prices of
related goods, expectations, congestion and network effects, type and number of
buyers
increase in supply - ANSWER-shift of supply curve to right
decrease in supply - ANSWER-shift of supply curve to left
five factors that shift market supply curve - ANSWER-input prices, productivity and
technology, prices of related outputs, expectations, type and number of sellers
equilibrium - ANSWER-no shortage or surplus; point at which there is no tendency for
change
surplus - ANSWER-whenever price is above equilibrium price; when quantity demanded
is less than quantity supplied
