ECO 3101 Exam 1 with correct answers
the 7 fundamental economic concepts - **🔰 VERIFIED ANSWERS🔰 ✔✔-scarcity
-reservation price
-opportunity cost
-ignore sunk costs
-absolute not proportional
-homo economicus
-marginal not average
the price at which a person would be indifferent between doing x and not doing x - **🔰
VERIFIED ANSWERS🔰 ✔✔reservations price
what are the common pitfalls in decision making? - **🔰 VERIFIED ANSWERS🔰 ✔✔1-
ignoring implicit costs
2-failing to ignore sunk costs
3-measuring costs and benefits and proportions rather than absolute dollar amounts
4-failure to understand the average-marginal distinction
the value of all that must be sacrificed to do the activity - **🔰 VERIFIED ANSWERS🔰
✔✔opportunity cost
the increase in total cost that results from carrying out one additional unit of an activity -
**🔰 VERIFIED ANSWERS🔰 ✔✔marginal cost
the increase in total benefit that results from carrying out one additional unit of an activity -
**🔰 VERIFIED ANSWERS🔰 ✔✔marginal benefit
, a cost that falls on people that were not directly involved in the activity - **🔰 VERIFIED
ANSWERS🔰 ✔✔external cost/negative externality
question about what policies or institutional arrangements lead to the best outcomes. Asks
what we ought to be doing. - **🔰 VERIFIED ANSWERS🔰 ✔✔normative question
question about the consequences of specific policies or institutional arrangements. - **🔰
VERIFIED ANSWERS🔰 ✔✔positive question
its price relative to the prices of other goods and services - **🔰 VERIFIED ANSWERS🔰
✔✔real price of a product
he empirical observation that when the price of a product falls, people demand larger
quantities of it - **🔰 VERIFIED ANSWERS🔰 ✔✔law of demand
he empirical observation that when the price of a product rises, people supply larger
quantities of it - **🔰 VERIFIED ANSWERS🔰 ✔✔law of supply
level above which the price of a good is not permitted by law to rise - **🔰 VERIFIED
ANSWERS🔰 ✔✔price ceiling
a minimum price for a good, established by law, and supported by government's offer to buy
the good at that price - **🔰 VERIFIED ANSWERS🔰 ✔✔price floor
the process whereby price directs existing supplies of a product to the users who value it
most - **🔰 VERIFIED ANSWERS🔰 ✔✔rationing function of price
the 7 fundamental economic concepts - **🔰 VERIFIED ANSWERS🔰 ✔✔-scarcity
-reservation price
-opportunity cost
-ignore sunk costs
-absolute not proportional
-homo economicus
-marginal not average
the price at which a person would be indifferent between doing x and not doing x - **🔰
VERIFIED ANSWERS🔰 ✔✔reservations price
what are the common pitfalls in decision making? - **🔰 VERIFIED ANSWERS🔰 ✔✔1-
ignoring implicit costs
2-failing to ignore sunk costs
3-measuring costs and benefits and proportions rather than absolute dollar amounts
4-failure to understand the average-marginal distinction
the value of all that must be sacrificed to do the activity - **🔰 VERIFIED ANSWERS🔰
✔✔opportunity cost
the increase in total cost that results from carrying out one additional unit of an activity -
**🔰 VERIFIED ANSWERS🔰 ✔✔marginal cost
the increase in total benefit that results from carrying out one additional unit of an activity -
**🔰 VERIFIED ANSWERS🔰 ✔✔marginal benefit
, a cost that falls on people that were not directly involved in the activity - **🔰 VERIFIED
ANSWERS🔰 ✔✔external cost/negative externality
question about what policies or institutional arrangements lead to the best outcomes. Asks
what we ought to be doing. - **🔰 VERIFIED ANSWERS🔰 ✔✔normative question
question about the consequences of specific policies or institutional arrangements. - **🔰
VERIFIED ANSWERS🔰 ✔✔positive question
its price relative to the prices of other goods and services - **🔰 VERIFIED ANSWERS🔰
✔✔real price of a product
he empirical observation that when the price of a product falls, people demand larger
quantities of it - **🔰 VERIFIED ANSWERS🔰 ✔✔law of demand
he empirical observation that when the price of a product rises, people supply larger
quantities of it - **🔰 VERIFIED ANSWERS🔰 ✔✔law of supply
level above which the price of a good is not permitted by law to rise - **🔰 VERIFIED
ANSWERS🔰 ✔✔price ceiling
a minimum price for a good, established by law, and supported by government's offer to buy
the good at that price - **🔰 VERIFIED ANSWERS🔰 ✔✔price floor
the process whereby price directs existing supplies of a product to the users who value it
most - **🔰 VERIFIED ANSWERS🔰 ✔✔rationing function of price
