ECON 202 FINAL OLE MISS
QUESTIONS & ANSWERS RATED
100% CORRECT
Principle #1 - Correct Answer ✔✔ People face trade-offs (decision-making)
example: chicken and dumplings vs. meatloaf
Principle #2 - Correct Answer ✔✔ Opportunity Cost
(the cost of something is what you give up to get it)
Principle #3 - Correct Answer ✔✔ Rational people look/ think at the margin (=)
MB>MC
Principle #4 - Correct Answer ✔✔ Markets are usually a good way to organize the
economic activities
Principle #5 - Correct Answer ✔✔ Something we need the gov't to improve the market
outcomes
Production Possibilities Frontier (PPF) - Correct Answer ✔✔ Shows all combinations of
output that an economy can possibly produce (given the available factors of production
and the available production technology that terms can use to turn these factors into
output), If resources are used efficiently!
Law of Demand - Correct Answer ✔✔ The quantity demanded of a good is the amount
of the good that buyers are willing and able to purchase (people prefer cheaper price)
Law of Supply - Correct Answer ✔✔ When price of a good rises, the quantity of this
good will rise as well, other things equal
3 Features of a Perfectly Competitive Market: - Correct Answer ✔✔ 1) All goods are
largely the same
2) Many buyers and sellers
*both buyers and sellers are "price-takers* (no one can influence the market price)
3) Free entry and exit
Substitutes - Correct Answer ✔✔ % change in Qd of good 1 and % change in P of good
2 go the SAME direction (positive cross-price elasticity)
Complements - Correct Answer ✔✔ % change in Qd of good 1 and % change in P of
good 2 go the OPPOSITE direction (negative cross-price elasticity)
QUESTIONS & ANSWERS RATED
100% CORRECT
Principle #1 - Correct Answer ✔✔ People face trade-offs (decision-making)
example: chicken and dumplings vs. meatloaf
Principle #2 - Correct Answer ✔✔ Opportunity Cost
(the cost of something is what you give up to get it)
Principle #3 - Correct Answer ✔✔ Rational people look/ think at the margin (=)
MB>MC
Principle #4 - Correct Answer ✔✔ Markets are usually a good way to organize the
economic activities
Principle #5 - Correct Answer ✔✔ Something we need the gov't to improve the market
outcomes
Production Possibilities Frontier (PPF) - Correct Answer ✔✔ Shows all combinations of
output that an economy can possibly produce (given the available factors of production
and the available production technology that terms can use to turn these factors into
output), If resources are used efficiently!
Law of Demand - Correct Answer ✔✔ The quantity demanded of a good is the amount
of the good that buyers are willing and able to purchase (people prefer cheaper price)
Law of Supply - Correct Answer ✔✔ When price of a good rises, the quantity of this
good will rise as well, other things equal
3 Features of a Perfectly Competitive Market: - Correct Answer ✔✔ 1) All goods are
largely the same
2) Many buyers and sellers
*both buyers and sellers are "price-takers* (no one can influence the market price)
3) Free entry and exit
Substitutes - Correct Answer ✔✔ % change in Qd of good 1 and % change in P of good
2 go the SAME direction (positive cross-price elasticity)
Complements - Correct Answer ✔✔ % change in Qd of good 1 and % change in P of
good 2 go the OPPOSITE direction (negative cross-price elasticity)
