ECS2601Questions with Correctly Answers Graded A
Plus
3 Fundamental Questions of Economics - CORRECT ANSWER ✔✔ -1. What to Produce
2. How Much to Produce
3. For Whom to Produce
Arc Elasticity of Demand - CORRECT ANSWER ✔✔ -The average price calculated between
the original price and the end price. (calculates the middle point)
Arc Elasticity of Demand Formula - CORRECT ANSWER ✔✔ -
Bandwagon Effect - CORRECT ANSWER ✔✔ -Positive Network Externalize. In which a
consumer wishes to posses a good in part because others do. (relatively elastic)
Basic Assumptions of Consumer Behaviour - CORRECT ANSWER ✔✔ -• Completeness
• Transivity
• Non-Satiation
• Convexity
Budget Constraints - CORRECT ANSWER ✔✔ -Constraints that consumers face as a result of
limited income.
Budget Line - CORRECT ANSWER ✔✔ -Graphical representation of limitations on behaviour
by possible combinations of goods for which the total amount of money used equals to income.
, Cardinal Utility Function - CORRECT ANSWER ✔✔ -Describes by how much one basket is
preffered over another.
Completely Inelastic - CORRECT ANSWER ✔✔ -Ep = 0
Principle that consumers will buy a fixed quantity of goods no matter the price.
Completeness - CORRECT ANSWER ✔✔ -Ignoring Price: Consumers compare and rank all
possible basket combinations to decide which one they prefer
Compliment - CORRECT ANSWER ✔✔ -two goods where a price increases for one causes the
demand to decrease for the second as they are both used together.
Consumer Behaviour - CORRECT ANSWER ✔✔ -1. Consumer Preferences
2. Budget Constraints
3. Consumer Choices
Consumer Choice - CORRECT ANSWER ✔✔ -Assumption that consumers attempt to choose
market baskets that maximizes their utility.
Consumer Surplus - CORRECT ANSWER ✔✔ -Difference between what a consumer is willing
to pay for a good and what is actually paid for it.`
Corner Solution - CORRECT ANSWER ✔✔ -Consumers spend their entire income on only one
good.
Cross Price Elasticity of Demand - CORRECT ANSWER ✔✔ -The percentage change of Good
A resulting form a 1% increase in the price of Good B.
Plus
3 Fundamental Questions of Economics - CORRECT ANSWER ✔✔ -1. What to Produce
2. How Much to Produce
3. For Whom to Produce
Arc Elasticity of Demand - CORRECT ANSWER ✔✔ -The average price calculated between
the original price and the end price. (calculates the middle point)
Arc Elasticity of Demand Formula - CORRECT ANSWER ✔✔ -
Bandwagon Effect - CORRECT ANSWER ✔✔ -Positive Network Externalize. In which a
consumer wishes to posses a good in part because others do. (relatively elastic)
Basic Assumptions of Consumer Behaviour - CORRECT ANSWER ✔✔ -• Completeness
• Transivity
• Non-Satiation
• Convexity
Budget Constraints - CORRECT ANSWER ✔✔ -Constraints that consumers face as a result of
limited income.
Budget Line - CORRECT ANSWER ✔✔ -Graphical representation of limitations on behaviour
by possible combinations of goods for which the total amount of money used equals to income.
, Cardinal Utility Function - CORRECT ANSWER ✔✔ -Describes by how much one basket is
preffered over another.
Completely Inelastic - CORRECT ANSWER ✔✔ -Ep = 0
Principle that consumers will buy a fixed quantity of goods no matter the price.
Completeness - CORRECT ANSWER ✔✔ -Ignoring Price: Consumers compare and rank all
possible basket combinations to decide which one they prefer
Compliment - CORRECT ANSWER ✔✔ -two goods where a price increases for one causes the
demand to decrease for the second as they are both used together.
Consumer Behaviour - CORRECT ANSWER ✔✔ -1. Consumer Preferences
2. Budget Constraints
3. Consumer Choices
Consumer Choice - CORRECT ANSWER ✔✔ -Assumption that consumers attempt to choose
market baskets that maximizes their utility.
Consumer Surplus - CORRECT ANSWER ✔✔ -Difference between what a consumer is willing
to pay for a good and what is actually paid for it.`
Corner Solution - CORRECT ANSWER ✔✔ -Consumers spend their entire income on only one
good.
Cross Price Elasticity of Demand - CORRECT ANSWER ✔✔ -The percentage change of Good
A resulting form a 1% increase in the price of Good B.
