Principles of
Microeconomics Exam
1 (58 questions and
answers)
Microeconomics - answer the study of how
households and firms
make decisions and how
they interact in markets
Macroeconomics - answer the study of economywide
phenomena, including
inflation, unemployment,
and economic growth
Scarcity - answer the limited nature of society's
resources
Opportunity Cost - answer whatever must be
given up to obtain some item
Consumer Surplus - answer the amount a buyer is
willing to pay for a good
minus the amount the
buyer actually pays for it
, Producer Surplus - answer the amount a seller is
paid for a good minus the
seller's cost of providing it
Direct Relationship - answer Two variables move in the same direction. It one
increases the other increases. If one decreases the other decreases.
Inverse Relationship - answer Two variables move in opposite directions. If
one increases the other decreases; and if one decreases the other increases.
Independent Relationship (Zero Relationship) - answer No relationship at all.
Price Ceiling - answer a legal maximum on the
price at which a good can be sold
Price Floor - answer a legal minimum on the
price at which a good can be sold
Positive Economics - answer The scientific aspect of economics that
determines "what is?"
Normative Economics - answer The portion of economics that attempts to
address "what should be?"
Law of Supply - answer the claim that, other
things equal, the quantity supplied of a
good rises when the price of the good
rises
Microeconomics Exam
1 (58 questions and
answers)
Microeconomics - answer the study of how
households and firms
make decisions and how
they interact in markets
Macroeconomics - answer the study of economywide
phenomena, including
inflation, unemployment,
and economic growth
Scarcity - answer the limited nature of society's
resources
Opportunity Cost - answer whatever must be
given up to obtain some item
Consumer Surplus - answer the amount a buyer is
willing to pay for a good
minus the amount the
buyer actually pays for it
, Producer Surplus - answer the amount a seller is
paid for a good minus the
seller's cost of providing it
Direct Relationship - answer Two variables move in the same direction. It one
increases the other increases. If one decreases the other decreases.
Inverse Relationship - answer Two variables move in opposite directions. If
one increases the other decreases; and if one decreases the other increases.
Independent Relationship (Zero Relationship) - answer No relationship at all.
Price Ceiling - answer a legal maximum on the
price at which a good can be sold
Price Floor - answer a legal minimum on the
price at which a good can be sold
Positive Economics - answer The scientific aspect of economics that
determines "what is?"
Normative Economics - answer The portion of economics that attempts to
address "what should be?"
Law of Supply - answer the claim that, other
things equal, the quantity supplied of a
good rises when the price of the good
rises
