ECON 1100 COMPLETE LATEST FINAL
REVIEW BASED QUESTIONS AND
ANSWERS
Buyers Gain Consumer Surplus When the market price is? - ANSWER-Less than the highest price buyers
are willing to pay.
A decrease in the supply of cars, ceteris paribus, leads to a ______ in the equilibrium price of cars and a
______ in the consumer surplus to buyers of cars? - ANSWER-Increase; Decrease
Which of the following is true regarding an effective (binding) price floor? - ANSWER-A deadweight loss
results from a price change
which of the following is true about a firm in the short run? - ANSWER-AFC = ATC - AVC
If marginal product is above the average product? - ANSWER-Average product is rising
If government wants to minimize the deadweight loss associated with a tax, it should impose the tax in a
market in which: - ANSWER-Demand and supply are both inelastic
4 Basic Resources - ANSWER-land, labor, capital, entrepreneurship
Law of Supply - ANSWER-as price goes up supply goes up; as price goes down supply goes down
Law of Demand - ANSWER-as price goes down demand goes up; as price goes up, demand goes down
Factors of Production - ANSWER-Land, Labor, Capital, and Entrepreneurial ability
Opportunity Cost - ANSWER-Alternative that is given up when a choice is made
A market economy is characterized by? - ANSWER-Buyers and Sellers
Absolute Advantage - ANSWER-Producing more output than another country
Comparative Advantage - ANSWER-Producing an output at a lower cost than another country
Trade Surplus - ANSWER-Exports exceed imports
Trade Deficit - ANSWER-Imports exceed exports
Normal Good - ANSWER-Increase in income leads to increase in demand; vice-versa
Inferior Good - ANSWER-Demand decreases when income increases; vice versa
Events that shift supply - ANSWER--Cost of production
-Improved Technology
-Act of Nature
-Taxes & Subsidies
Changes in Equilibrium price and quantity: - ANSWER-Increase in demand: leads to increase in
equilibrium price and quantity
Decrease in demand: leads to decrease in equilibrium price and quantity
Increase in supply: leads to decrease in equilibrium price and increase in quantity
Decrease in supply: leads to increase in equilibrium price and decrease in quantity
Possible shifts in Supply & Demand on graph: - ANSWER-Both supply and demand increase: equilibrium
quantity increases
Both supply and demand decrease: equilibrium quantity decreases
Supply decreases and demand increases: equilibrium price increases
Supply increases and demand decreases: equilibrium price decreases
REVIEW BASED QUESTIONS AND
ANSWERS
Buyers Gain Consumer Surplus When the market price is? - ANSWER-Less than the highest price buyers
are willing to pay.
A decrease in the supply of cars, ceteris paribus, leads to a ______ in the equilibrium price of cars and a
______ in the consumer surplus to buyers of cars? - ANSWER-Increase; Decrease
Which of the following is true regarding an effective (binding) price floor? - ANSWER-A deadweight loss
results from a price change
which of the following is true about a firm in the short run? - ANSWER-AFC = ATC - AVC
If marginal product is above the average product? - ANSWER-Average product is rising
If government wants to minimize the deadweight loss associated with a tax, it should impose the tax in a
market in which: - ANSWER-Demand and supply are both inelastic
4 Basic Resources - ANSWER-land, labor, capital, entrepreneurship
Law of Supply - ANSWER-as price goes up supply goes up; as price goes down supply goes down
Law of Demand - ANSWER-as price goes down demand goes up; as price goes up, demand goes down
Factors of Production - ANSWER-Land, Labor, Capital, and Entrepreneurial ability
Opportunity Cost - ANSWER-Alternative that is given up when a choice is made
A market economy is characterized by? - ANSWER-Buyers and Sellers
Absolute Advantage - ANSWER-Producing more output than another country
Comparative Advantage - ANSWER-Producing an output at a lower cost than another country
Trade Surplus - ANSWER-Exports exceed imports
Trade Deficit - ANSWER-Imports exceed exports
Normal Good - ANSWER-Increase in income leads to increase in demand; vice-versa
Inferior Good - ANSWER-Demand decreases when income increases; vice versa
Events that shift supply - ANSWER--Cost of production
-Improved Technology
-Act of Nature
-Taxes & Subsidies
Changes in Equilibrium price and quantity: - ANSWER-Increase in demand: leads to increase in
equilibrium price and quantity
Decrease in demand: leads to decrease in equilibrium price and quantity
Increase in supply: leads to decrease in equilibrium price and increase in quantity
Decrease in supply: leads to increase in equilibrium price and decrease in quantity
Possible shifts in Supply & Demand on graph: - ANSWER-Both supply and demand increase: equilibrium
quantity increases
Both supply and demand decrease: equilibrium quantity decreases
Supply decreases and demand increases: equilibrium price increases
Supply increases and demand decreases: equilibrium price decreases
