PRINCIPLES OF MICROECONOMICS FINAL
EXAM FINAL SCRIPT 2026 COMPLETE
SOLUTION SET
◉ What are the factors that affect demand? Answer: price of a
good(-)
price of a substitute good(+)
price of a complement good(-)
taste and preference
population
expected price
◉ What are the factors that affect supply? Answer: price of a
good(+)
price of a substitute good(+)
price of resources used in production(-)
technology(+)
price of related goods in production
number of firms
expected price
, ◉ How is a single equilibrium price determined in the market?
Answer: an equilibrium occurs if when the system is away from the
point, there are forces in the system that will bring it back to that
point
when price is above equilibrium, there is a surplus as the result of
which price starts to fall
that causes an increase in quantity demanded and a decrease in
quantity supplied, reducing the surplus until Qd=Qs
when the price is below equilibrium, there is a shortage, as the
result of which price start to rise
that causes a decrease in quantity demanded and an increase in
quantity supplied, reducing the shortage until Qd=Qs
◉ What is consumer surplus? Answer: net gain to a buyer from
purchase of a good
the difference between the buyers willingness to pay and the price
paid
is the um of marginal willingness to pay - price
is total willingness to pay - amount paid
area under the demand curve and above the price
◉ What is producer surplus? Answer: net gain to producer from
selling a good
=sum(price-seller cost)
EXAM FINAL SCRIPT 2026 COMPLETE
SOLUTION SET
◉ What are the factors that affect demand? Answer: price of a
good(-)
price of a substitute good(+)
price of a complement good(-)
taste and preference
population
expected price
◉ What are the factors that affect supply? Answer: price of a
good(+)
price of a substitute good(+)
price of resources used in production(-)
technology(+)
price of related goods in production
number of firms
expected price
, ◉ How is a single equilibrium price determined in the market?
Answer: an equilibrium occurs if when the system is away from the
point, there are forces in the system that will bring it back to that
point
when price is above equilibrium, there is a surplus as the result of
which price starts to fall
that causes an increase in quantity demanded and a decrease in
quantity supplied, reducing the surplus until Qd=Qs
when the price is below equilibrium, there is a shortage, as the
result of which price start to rise
that causes a decrease in quantity demanded and an increase in
quantity supplied, reducing the shortage until Qd=Qs
◉ What is consumer surplus? Answer: net gain to a buyer from
purchase of a good
the difference between the buyers willingness to pay and the price
paid
is the um of marginal willingness to pay - price
is total willingness to pay - amount paid
area under the demand curve and above the price
◉ What is producer surplus? Answer: net gain to producer from
selling a good
=sum(price-seller cost)
