ENV320 FINAL ACTUAL EXAM PAPER 2026 QUESTIONS
WITH ANSWERS GRADED A+
● Law of Demand. Answer: · As the price of goods or services goes up, the quantity
demanded goes down & vice versa. · Negative/inverse relationship between the price &
quantity demanded.
● Law of Supply. Answer: When the price of goods or services goes up, the quantity
supplied goes up.
● Normal good. Answer: A good that consumers demand more of when their income
increases.
● Quantity demanded. Answer: The amount of a good or service that a consumer is willing
and able to purchase at a given price
● Demand curve. Answer: A graph of the relationship between the price of a good and the
quantity demanded
● What is the reason why the quantity demanded of a good increase when its price
falls?. Answer: · Substitution effect: when things become cheaper, people tend to buy more of
that good. (Coffee vs. tea example: if the price of coffee goes up, people will start buying more
tea) · Income effect: you want to spend $100 on coffee each month. If the price increases, you
can't buy as much coffee / if the price decreases you can buy more.
● Surplus. Answer: A situation in which quantity supplied is greater than quantity demanded.
They do not last - sellers will reduce the price to move goods off the shelves. Price is above
equilibrium
● Shortage. Answer: A situation in which quantity demanded is greater than quantity
supplied. They do not last - sellers will increase prices to increase revenue. Price is below
equilibrium
● Factors that shift the demand curve. Answer: Changes in... 1. income 2. price of related
goods (coffee vs. tea) 3. expectations (of future prices) 4. number of consumers 5.
tastes/preferences
WITH ANSWERS GRADED A+
● Law of Demand. Answer: · As the price of goods or services goes up, the quantity
demanded goes down & vice versa. · Negative/inverse relationship between the price &
quantity demanded.
● Law of Supply. Answer: When the price of goods or services goes up, the quantity
supplied goes up.
● Normal good. Answer: A good that consumers demand more of when their income
increases.
● Quantity demanded. Answer: The amount of a good or service that a consumer is willing
and able to purchase at a given price
● Demand curve. Answer: A graph of the relationship between the price of a good and the
quantity demanded
● What is the reason why the quantity demanded of a good increase when its price
falls?. Answer: · Substitution effect: when things become cheaper, people tend to buy more of
that good. (Coffee vs. tea example: if the price of coffee goes up, people will start buying more
tea) · Income effect: you want to spend $100 on coffee each month. If the price increases, you
can't buy as much coffee / if the price decreases you can buy more.
● Surplus. Answer: A situation in which quantity supplied is greater than quantity demanded.
They do not last - sellers will reduce the price to move goods off the shelves. Price is above
equilibrium
● Shortage. Answer: A situation in which quantity demanded is greater than quantity
supplied. They do not last - sellers will increase prices to increase revenue. Price is below
equilibrium
● Factors that shift the demand curve. Answer: Changes in... 1. income 2. price of related
goods (coffee vs. tea) 3. expectations (of future prices) 4. number of consumers 5.
tastes/preferences
