ECO 3101 FSU exam with answers
optimization principle - **🔰 VERIFIED ANSWERS🔰 ✔✔people try to choose the best
patterns of consumption that they can afford
equilibrium principle - **🔰 VERIFIED ANSWERS🔰 ✔✔prices adjust until the amount
that people demand of something is equal to the amount that is supplied
reservation price - **🔰 VERIFIED ANSWERS🔰 ✔✔the highest price that a given person
will accept and still purchase the good
budget set - **🔰 VERIFIED ANSWERS🔰 ✔✔p1x1 + p2x2 ≤ m
Supply and Demand - **🔰 VERIFIED ANSWERS🔰 ✔✔Helps us to explain why and how
prices change over time, in response to several different economic factors
Captures the interaction between buyers and sellers
Illustrates how the market mechanism works
Apartment Market - **🔰 VERIFIED ANSWERS🔰 ✔✔The forces of supply and demand
can aid us in determining the market equilibrium price and the allocation of apartments to
students
Short Run Supply - **🔰 VERIFIED ANSWERS🔰 ✔✔vertical line on graph
Supply Curve - **🔰 VERIFIED ANSWERS🔰 ✔✔Relationship between the quantity of a
good that producers are willing to sell and the price of the good
Upward sloping, since a higher price → firms are willing to produce and sell more
, What causes a shift in the supply curve? - **🔰 VERIFIED ANSWERS🔰 ✔✔Changes in
productions costs; wages, cost of materials, weather conditions, new technology
Demand Curve - **🔰 VERIFIED ANSWERS🔰 ✔✔Relationship between the quantity of a
good that consumers are willing to buy and the price of the good
Downward sloping since a lower price → more quantity demanded
What causes a shift in the Demand curve? - **🔰 VERIFIED ANSWERS🔰 ✔✔Changes in
income, weather, price of substitutes and complements
Equilibrium occurs - **🔰 VERIFIED ANSWERS🔰 ✔✔at the market-clearing price and
quantity
price at which QS = QD
Surplus - **🔰 VERIFIED ANSWERS🔰 ✔✔Firms will compete by offering to sell for lower
prices
Located on top of the lines
Shortage - **🔰 VERIFIED ANSWERS🔰 ✔✔Consumers will compete by offering to buy
for
higher prices
Located on bottom of the lines
Competitive - **🔰 VERIFIED ANSWERS🔰 ✔✔no buyer or seller has any market power -
no individual ability to affect the market price
optimization principle - **🔰 VERIFIED ANSWERS🔰 ✔✔people try to choose the best
patterns of consumption that they can afford
equilibrium principle - **🔰 VERIFIED ANSWERS🔰 ✔✔prices adjust until the amount
that people demand of something is equal to the amount that is supplied
reservation price - **🔰 VERIFIED ANSWERS🔰 ✔✔the highest price that a given person
will accept and still purchase the good
budget set - **🔰 VERIFIED ANSWERS🔰 ✔✔p1x1 + p2x2 ≤ m
Supply and Demand - **🔰 VERIFIED ANSWERS🔰 ✔✔Helps us to explain why and how
prices change over time, in response to several different economic factors
Captures the interaction between buyers and sellers
Illustrates how the market mechanism works
Apartment Market - **🔰 VERIFIED ANSWERS🔰 ✔✔The forces of supply and demand
can aid us in determining the market equilibrium price and the allocation of apartments to
students
Short Run Supply - **🔰 VERIFIED ANSWERS🔰 ✔✔vertical line on graph
Supply Curve - **🔰 VERIFIED ANSWERS🔰 ✔✔Relationship between the quantity of a
good that producers are willing to sell and the price of the good
Upward sloping, since a higher price → firms are willing to produce and sell more
, What causes a shift in the supply curve? - **🔰 VERIFIED ANSWERS🔰 ✔✔Changes in
productions costs; wages, cost of materials, weather conditions, new technology
Demand Curve - **🔰 VERIFIED ANSWERS🔰 ✔✔Relationship between the quantity of a
good that consumers are willing to buy and the price of the good
Downward sloping since a lower price → more quantity demanded
What causes a shift in the Demand curve? - **🔰 VERIFIED ANSWERS🔰 ✔✔Changes in
income, weather, price of substitutes and complements
Equilibrium occurs - **🔰 VERIFIED ANSWERS🔰 ✔✔at the market-clearing price and
quantity
price at which QS = QD
Surplus - **🔰 VERIFIED ANSWERS🔰 ✔✔Firms will compete by offering to sell for lower
prices
Located on top of the lines
Shortage - **🔰 VERIFIED ANSWERS🔰 ✔✔Consumers will compete by offering to buy
for
higher prices
Located on bottom of the lines
Competitive - **🔰 VERIFIED ANSWERS🔰 ✔✔no buyer or seller has any market power -
no individual ability to affect the market price
