Economics 201 Exam #1 Questions and Answers 100% Pass

Economics 201 Exam #1 Questions and Answers 100% Pass Chapter 1 - .... Incentives - Rewards and penalties that motivate behavior Opportunity Cost - Choose is the value of the opportunities lost Inflation - Increase in the general level of prices Chapter 2 - ... Absolute Advantage - The ability to produce the same good using fewer inputs than another producer Production Possibilites Frontier (PPF) - Shows all the combinations of goods that a country can produce given its productivity and supply of inputs. Comparative Advantage - When a country can produce goods for which it has the lowest opportunity cost Chapter 3 - ... Demand Curve - A function that shows the quantity demanded at different prices EMILY CHARLENE © 2025, ALL RIGHTS RESERVED 2 Quantity Demanded - The quantity that buyers are willing and able to buy at a particular price Consumer Surplus - The consumer's gain from exchange or the difference between he maximum price a consumer is willing to pay for a certain quantity and the market price Total Consumer Surplus - Measured by the area beneath t