Econ 111 final exam || WITH 100% CORRECT
ANSWERS!!
Market Economy correct answers economic system where production and consumption
decisions are made by individual procedures and consumers (system of cooperation based on
voluntary production and exchange)
market failure correct answers decision maker enjoys benefits of a decision but doesnt bear
the costs
microeconomics correct answers study of how individuals make decisions and how these
decisions interact
Markets:buyers and sellers
prices, output and profit
macroeconomics correct answers study of a nations economy as a whole, interested in
changes in overall price level (inflation), gdp, unemployment rate
scarcity correct answers peoples wants and desires for things that exceed the amount of
resources available to meet them
-scarcity forces people to choose
-micro econ is study of how people cope with scarcity
opportunity cost correct answers value of best alternative sacrifice when making a choice
-subjective
specialization/gains from exchange correct answers small market-jack of all trades
large market- master of one trade
why is specialization done correct answers to increase efficiency
how much correct answers is a decision at the margin
equilibrium correct answers an economic situation when no individual is better off doing
something different
equity correct answers fair distribution of benefits
efficiency correct answers all opportunities to make some people better off without making
others worse off
product market correct answers markets for final goods and services
-firms are seller
-households are buyers
factor markets correct answers Markets for the factors of production like labor, capital,
natural resources, and entrepreneurial ability
-firms are buyers
-households are sellers
, circular flow diagram correct answers inside circle:product market(revenue) firms (wages,
interest and rent) factor market(income) household (expenditures)outside circle: product
market (products) household (physical capital, labor and natural resources) factor market
(factors) firms (goods and services)
supply and demand correct answers model of competitive market, where there are many
buyers and sellers
demand schedule correct answers shows how much of a product consumers are willing and
able to buy at different prices
quantity demanded correct answers actual amount of product the consumers are willing and
able to buy at a specific price
law of demand correct answers higher(lower) the price a product, the lower(higher) the
quantity demanded per time period (ceterbis paribus)
Change In Price correct answers movement along the curve
change in factor other then price correct answers creates new curve or supply schedule
factors that shift the demand curve correct answers income, price of related goods,
expectations of future prices, number of buyers, tasks
changes in price of related goods correct answers substitutes (goods that can be used for same
purpose)
increase(demand) buyers are willing and able to buy more (less) at each price
compliments(goods and services that are used together)
changes in income correct answers normal goods(increase/decrease in income leads to
increase/decrease in demand)
inferior goods (increase/decrease in incomes leads to a decrease/increase in demand) only
good cause what you can afford at the time
changes in tasks correct answers changes in demand arising from fads, cultural shifts,
availability of new info
changes in expectations over future price correct answers expectation of future price
increase/decrease leads to an increase/decrease in demand today
changes in number of consumer correct answers growing population leads to an increase in
demand for product
supply schedule correct answers shows how much of a product sellers are willing and able to
offer for sale at different prices
quantity supplied correct answers shows how much of a product sellers are willing and able
to offer for sale at specific price
ANSWERS!!
Market Economy correct answers economic system where production and consumption
decisions are made by individual procedures and consumers (system of cooperation based on
voluntary production and exchange)
market failure correct answers decision maker enjoys benefits of a decision but doesnt bear
the costs
microeconomics correct answers study of how individuals make decisions and how these
decisions interact
Markets:buyers and sellers
prices, output and profit
macroeconomics correct answers study of a nations economy as a whole, interested in
changes in overall price level (inflation), gdp, unemployment rate
scarcity correct answers peoples wants and desires for things that exceed the amount of
resources available to meet them
-scarcity forces people to choose
-micro econ is study of how people cope with scarcity
opportunity cost correct answers value of best alternative sacrifice when making a choice
-subjective
specialization/gains from exchange correct answers small market-jack of all trades
large market- master of one trade
why is specialization done correct answers to increase efficiency
how much correct answers is a decision at the margin
equilibrium correct answers an economic situation when no individual is better off doing
something different
equity correct answers fair distribution of benefits
efficiency correct answers all opportunities to make some people better off without making
others worse off
product market correct answers markets for final goods and services
-firms are seller
-households are buyers
factor markets correct answers Markets for the factors of production like labor, capital,
natural resources, and entrepreneurial ability
-firms are buyers
-households are sellers
, circular flow diagram correct answers inside circle:product market(revenue) firms (wages,
interest and rent) factor market(income) household (expenditures)outside circle: product
market (products) household (physical capital, labor and natural resources) factor market
(factors) firms (goods and services)
supply and demand correct answers model of competitive market, where there are many
buyers and sellers
demand schedule correct answers shows how much of a product consumers are willing and
able to buy at different prices
quantity demanded correct answers actual amount of product the consumers are willing and
able to buy at a specific price
law of demand correct answers higher(lower) the price a product, the lower(higher) the
quantity demanded per time period (ceterbis paribus)
Change In Price correct answers movement along the curve
change in factor other then price correct answers creates new curve or supply schedule
factors that shift the demand curve correct answers income, price of related goods,
expectations of future prices, number of buyers, tasks
changes in price of related goods correct answers substitutes (goods that can be used for same
purpose)
increase(demand) buyers are willing and able to buy more (less) at each price
compliments(goods and services that are used together)
changes in income correct answers normal goods(increase/decrease in income leads to
increase/decrease in demand)
inferior goods (increase/decrease in incomes leads to a decrease/increase in demand) only
good cause what you can afford at the time
changes in tasks correct answers changes in demand arising from fads, cultural shifts,
availability of new info
changes in expectations over future price correct answers expectation of future price
increase/decrease leads to an increase/decrease in demand today
changes in number of consumer correct answers growing population leads to an increase in
demand for product
supply schedule correct answers shows how much of a product sellers are willing and able to
offer for sale at different prices
quantity supplied correct answers shows how much of a product sellers are willing and able
to offer for sale at specific price
