ECON 2106 EXAM 1
artificial barrier and trade - ANS-restrictions created by the government that inhibit or
prevent trade; quotas and tariffs
barter - ANS-direct exchange of one good or service for another without the use of
money
ceteris paribus - ANS-everything remains constant; all else equal
change in demand - ANS-shift of the entire demand curve
comparative advantage - ANS-the ability of an individual or a country to produce a good
at a lower marginal opportunity production cost than another individual or country
complements - ANS-products for which an inverse relationship exists between changes
in the price of one and changes in demand for the other
costs of production, technology, regulations, input prices, taxes and subsidies, prices of
related goods, expectations regarding future price, number of firms in the market -
ANS-factors that affect supply
demand curve - ANS-a schedule of alternative prices and corresponding quantities of a
good or service which consumers are willing and able to purchase, ceteris paribus
economics - ANS-the study of how individuals allocate scarce resources among
unlimited wants
equilibrium - ANS-a situation in which the buyers and sellers in any given market have
no incentive to change their behavior; occurs on a graph where quantity supplied equals
quantity demanded
exchange costs - ANS-any costs that occur as a result of trade; includes transaction,
transportation and artificial barrier and trade costs
explicit cost - ANS-accounting costs or money cost
Fallacy of Composition - ANS-occurs when you assume that what is true for the part is
true for the whole
artificial barrier and trade - ANS-restrictions created by the government that inhibit or
prevent trade; quotas and tariffs
barter - ANS-direct exchange of one good or service for another without the use of
money
ceteris paribus - ANS-everything remains constant; all else equal
change in demand - ANS-shift of the entire demand curve
comparative advantage - ANS-the ability of an individual or a country to produce a good
at a lower marginal opportunity production cost than another individual or country
complements - ANS-products for which an inverse relationship exists between changes
in the price of one and changes in demand for the other
costs of production, technology, regulations, input prices, taxes and subsidies, prices of
related goods, expectations regarding future price, number of firms in the market -
ANS-factors that affect supply
demand curve - ANS-a schedule of alternative prices and corresponding quantities of a
good or service which consumers are willing and able to purchase, ceteris paribus
economics - ANS-the study of how individuals allocate scarce resources among
unlimited wants
equilibrium - ANS-a situation in which the buyers and sellers in any given market have
no incentive to change their behavior; occurs on a graph where quantity supplied equals
quantity demanded
exchange costs - ANS-any costs that occur as a result of trade; includes transaction,
transportation and artificial barrier and trade costs
explicit cost - ANS-accounting costs or money cost
Fallacy of Composition - ANS-occurs when you assume that what is true for the part is
true for the whole
