Principles of Microeconomics Exam 1.Final Test 2026\2027.
Microeconomics
the study of how
households and firms
make decisions and how
they interact in markets
Macroeconomics
the study of economywide
phenomena, including
inflation, unemployment,
and economic growth
Scarcity
the limited nature of society's
resources
Opportunity Cost
whatever must be
given up to obtain some item
Consumer Surplus
the amount a buyer is
willing to pay for a good
minus the amount the
buyer actually pays for it
Producer Surplus
the amount a seller is
paid for a good minus the
seller's cost of providing it
, Principles of Microeconomics Exam 1.Final Test 2026\2027.
Direct Relationship
Two variables move in the same direction. It one increases the other increases. If
one decreases the other decreases.
Inverse Relationship
Two variables move in opposite directions. If one increases the other decreases;
and if one decreases the other increases.
Independent Relationship (Zero Relationship)
No relationship at all.
Price Ceiling
a legal maximum on the
price at which a good can be sold
Price Floor
a legal minimum on the
price at which a good can be sold
Positive Economics
The scientific aspect of economics that determines "what is?"
Normative Economics
The portion of economics that attempts to address "what should be?"
Law of Supply
the claim that, other
things equal, the quantity supplied of a
good rises when the price of the good
rises
Law of Demand
the claim that, other
things equal, the quantity demanded of a
good falls when the price of the good rises
Microeconomics
the study of how
households and firms
make decisions and how
they interact in markets
Macroeconomics
the study of economywide
phenomena, including
inflation, unemployment,
and economic growth
Scarcity
the limited nature of society's
resources
Opportunity Cost
whatever must be
given up to obtain some item
Consumer Surplus
the amount a buyer is
willing to pay for a good
minus the amount the
buyer actually pays for it
Producer Surplus
the amount a seller is
paid for a good minus the
seller's cost of providing it
, Principles of Microeconomics Exam 1.Final Test 2026\2027.
Direct Relationship
Two variables move in the same direction. It one increases the other increases. If
one decreases the other decreases.
Inverse Relationship
Two variables move in opposite directions. If one increases the other decreases;
and if one decreases the other increases.
Independent Relationship (Zero Relationship)
No relationship at all.
Price Ceiling
a legal maximum on the
price at which a good can be sold
Price Floor
a legal minimum on the
price at which a good can be sold
Positive Economics
The scientific aspect of economics that determines "what is?"
Normative Economics
The portion of economics that attempts to address "what should be?"
Law of Supply
the claim that, other
things equal, the quantity supplied of a
good rises when the price of the good
rises
Law of Demand
the claim that, other
things equal, the quantity demanded of a
good falls when the price of the good rises
