AGEC 101 FINAL PAPER 2025/2026 QUESTIONS AND
ANSWERS RATED A+
✔✔determinates of demand - ✔✔own price, prices of related goods (complements and
substitutes), income, taste/preferences, expected/future prices, population
✔✔own price - ✔✔Price of your product. Only affects "Quantity Demanded"
✔✔complements - ✔✔Goods purchased together, like hotdogs and hotdog buns. If
hotdog buns skyrocket in price, consumers are less likely to purchase your hotdogs.
✔✔substitutes - ✔✔Goods that can be replaced for one another, ex: Beef and chicken.
It's very easy to just say "well, I guess we'll just have chicken instead of burgers"
✔✔income (Y) - ✔✔Income of the consumer. If a consumer loses their job, they might
be less likely to buy hamburgers. If a consumer gets promoted, they might celebrate
with a steak.
✔✔Tastes/preferences (TP) - ✔✔Consumers might be loyal to a certain brand or a
certain type of food, ex: a consumer might still buy more expensive original Oreos rather
than cheaper/on sale golden Oreos.
✔✔Expected/future prices (Pf) - ✔✔consumers might demand more of an item if the
price is expected to or is going to skyrocket shortly, so they may stockpile. They may
also hold off purchasing certain items if it is believed that the price will decline soon
✔✔population (POP) - ✔✔Population affects who is available to buy. Also, slow
population change means slow consumption Change.
✔✔demand elasticity - ✔✔the degree to which demand responds to a change in an
economic factor (most often price)
✔✔law of supply - ✔✔the law of supply states that, all other factos being equal, as the
price of a good or service increases, the quantity of goods or services that suppliers
offer will increase, and vice versa. P^ Q(s)^ [as the price increases, so does the quantity
supplied]. Pv Q(s)v [as the price decreases, the quantity supplied decreases].
✔✔supply curve - ✔✔Increase in Quantity Supplied - Movement up and ALONG the
supply curve. Price increases as well as Quantity supplied
Decrease in Quantity Supplied - Movement down and ALONG the supply curve. Price
decreases and quantity supplied decreases.
✔✔quantity supplied - ✔✔Describes the number of goods or services that suppliers will
produce and sell at a given market price.
, ✔✔Determinates of supply - ✔✔technology, number of suppliers, increase in inputs,
and price
✔✔Total Physical Product (TPP) - ✔✔Definition: The quantity of output that is produced
from a firm's fixed inputs and a specified level of variable inputs
Calculation: Look at total amount of product
✔✔Marginal Physical Product (MPP) - ✔✔Definition: How much of an additional output
is produced when we add one more unit of our variable input
Calculation: Output2 - Output1 / Input2 - Input1
✔✔Average Physical Product (APP) - ✔✔Definition: The average amount of an output
of a variable input produce
Calculation: output/input
✔✔Law of Diminishing Marginal Returns - ✔✔The law of diminishing marginal returns is
essentially the idea that adding another employee after reaching optimization makes the
production a company can do less efficient. Paper widget example from class.
✔✔Marginal Value Product (MVP) - ✔✔Definition: a measure of the extra revenue
which results from increasing the quantity of an input used by one unit, all other units
remaining constant.
Calculation: Change in Total revenue / change in the amount of goods produced.
✔✔Marginal Input Cost (MIC) - ✔✔Definition: The change in total production cost that
comes from making one extra unit
Calculation: change in total expenses / change in quantity of units produced
✔✔Profit maximizing input level - ✔✔It's where MC = MR on the second point u shaped
graph
✔✔Strategic Management - ✔✔The process by which managers choose a set of
strategies that will allow their firm to be the first choice of their customers, employees,
and investors. Includes a vision statement, strategic plan, and the implementation of the
plan. (mission and vision statement)
✔✔Mission Statement - ✔✔Action based statement. It defines business production and
how it will meet customer needs. It's the means by which you will achieve your vision.
Based on sustainable competitive advantage. Strategies and tactics.
Long-term - Vision, Mission, Values
Medium-term - Goals, Strategies, Policies
Short-term - Objectives, Tactics, Procedures
ANSWERS RATED A+
✔✔determinates of demand - ✔✔own price, prices of related goods (complements and
substitutes), income, taste/preferences, expected/future prices, population
✔✔own price - ✔✔Price of your product. Only affects "Quantity Demanded"
✔✔complements - ✔✔Goods purchased together, like hotdogs and hotdog buns. If
hotdog buns skyrocket in price, consumers are less likely to purchase your hotdogs.
✔✔substitutes - ✔✔Goods that can be replaced for one another, ex: Beef and chicken.
It's very easy to just say "well, I guess we'll just have chicken instead of burgers"
✔✔income (Y) - ✔✔Income of the consumer. If a consumer loses their job, they might
be less likely to buy hamburgers. If a consumer gets promoted, they might celebrate
with a steak.
✔✔Tastes/preferences (TP) - ✔✔Consumers might be loyal to a certain brand or a
certain type of food, ex: a consumer might still buy more expensive original Oreos rather
than cheaper/on sale golden Oreos.
✔✔Expected/future prices (Pf) - ✔✔consumers might demand more of an item if the
price is expected to or is going to skyrocket shortly, so they may stockpile. They may
also hold off purchasing certain items if it is believed that the price will decline soon
✔✔population (POP) - ✔✔Population affects who is available to buy. Also, slow
population change means slow consumption Change.
✔✔demand elasticity - ✔✔the degree to which demand responds to a change in an
economic factor (most often price)
✔✔law of supply - ✔✔the law of supply states that, all other factos being equal, as the
price of a good or service increases, the quantity of goods or services that suppliers
offer will increase, and vice versa. P^ Q(s)^ [as the price increases, so does the quantity
supplied]. Pv Q(s)v [as the price decreases, the quantity supplied decreases].
✔✔supply curve - ✔✔Increase in Quantity Supplied - Movement up and ALONG the
supply curve. Price increases as well as Quantity supplied
Decrease in Quantity Supplied - Movement down and ALONG the supply curve. Price
decreases and quantity supplied decreases.
✔✔quantity supplied - ✔✔Describes the number of goods or services that suppliers will
produce and sell at a given market price.
, ✔✔Determinates of supply - ✔✔technology, number of suppliers, increase in inputs,
and price
✔✔Total Physical Product (TPP) - ✔✔Definition: The quantity of output that is produced
from a firm's fixed inputs and a specified level of variable inputs
Calculation: Look at total amount of product
✔✔Marginal Physical Product (MPP) - ✔✔Definition: How much of an additional output
is produced when we add one more unit of our variable input
Calculation: Output2 - Output1 / Input2 - Input1
✔✔Average Physical Product (APP) - ✔✔Definition: The average amount of an output
of a variable input produce
Calculation: output/input
✔✔Law of Diminishing Marginal Returns - ✔✔The law of diminishing marginal returns is
essentially the idea that adding another employee after reaching optimization makes the
production a company can do less efficient. Paper widget example from class.
✔✔Marginal Value Product (MVP) - ✔✔Definition: a measure of the extra revenue
which results from increasing the quantity of an input used by one unit, all other units
remaining constant.
Calculation: Change in Total revenue / change in the amount of goods produced.
✔✔Marginal Input Cost (MIC) - ✔✔Definition: The change in total production cost that
comes from making one extra unit
Calculation: change in total expenses / change in quantity of units produced
✔✔Profit maximizing input level - ✔✔It's where MC = MR on the second point u shaped
graph
✔✔Strategic Management - ✔✔The process by which managers choose a set of
strategies that will allow their firm to be the first choice of their customers, employees,
and investors. Includes a vision statement, strategic plan, and the implementation of the
plan. (mission and vision statement)
✔✔Mission Statement - ✔✔Action based statement. It defines business production and
how it will meet customer needs. It's the means by which you will achieve your vision.
Based on sustainable competitive advantage. Strategies and tactics.
Long-term - Vision, Mission, Values
Medium-term - Goals, Strategies, Policies
Short-term - Objectives, Tactics, Procedures
