ECON 301 EXAM 2025 QUESTIONS
AND ANSWERS
There are four key assumptions underlying the supply and demand model. Name
these assumptions. - --CORRECT ANSWER--The supply and demand model
assumes that (a) supply and demand are in a single market, (b) all goods in the
market are identical, (c) all goods sell for the same price and everyone in the
market has the same information, and (d) there are many consumers and producers
in the market.
Complements and substitutes of a given good affect the demand for that good.
Define complements and substitutes. - --CORRECT ANSWER--A complement is
a good that is purchased and used in combination with another good. A substitute
is a good that can be used in place of another good.
What simplifying assumption do we make to build a demand curve? Why is the
demand curve downward-sloping? - --CORRECT ANSWER--We assume that
there is no change in any other factors that may also affect how much of a good a
consumer buys. The downward slope reflects the fact that consumers demand less
of a good as its price increases.
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, What is the difference between a change in quantity demanded and a change in
demand? - --CORRECT ANSWER--A change in quantity demanded is a
movement along the demand curve that occurs because of a change in the good's
own price, while a change in demand reflects a shift of the entire demand curve
caused by a change in a determinant of demand other than the good's price.
What form do inverse supply and demand equations take? Why do economists
often represent supply and demand using the inverse equations? - --CORRECT
ANSWER--The inverse demand curve expresses the price of a product as a
function of quantity demanded. The inverse supply curve expresses the price of a
product as a function of quantity supplied. Expressing price as a function of
quantity makes the demand and supply choke prices more explicit.
Why is the supply curve upward-sloping? - --CORRECT ANSWER--The upward
slope of the supply curve reflects the fact that holding all else equal, producers
supply more of a good as its price increases.
What is the difference between a change in quantity supplied and a change in
supply? - --CORRECT ANSWER--A change in quantity supplied is a movement
along the supply curve that occurs because of a change in the good's own price,
while a change in supply reflects a shift of the entire supply curve caused by a
change in a determinant of supply other than the good's price.
Define market equilibrium. What is true of the quantity supplied and demanded at
the market equilibrium? - --CORRECT ANSWER--The market equilibrium occurs
....COPYRIGHT ©️ 2025 ALL RIGHTS RESERVED...TRUSTED & VERIFIED 2
AND ANSWERS
There are four key assumptions underlying the supply and demand model. Name
these assumptions. - --CORRECT ANSWER--The supply and demand model
assumes that (a) supply and demand are in a single market, (b) all goods in the
market are identical, (c) all goods sell for the same price and everyone in the
market has the same information, and (d) there are many consumers and producers
in the market.
Complements and substitutes of a given good affect the demand for that good.
Define complements and substitutes. - --CORRECT ANSWER--A complement is
a good that is purchased and used in combination with another good. A substitute
is a good that can be used in place of another good.
What simplifying assumption do we make to build a demand curve? Why is the
demand curve downward-sloping? - --CORRECT ANSWER--We assume that
there is no change in any other factors that may also affect how much of a good a
consumer buys. The downward slope reflects the fact that consumers demand less
of a good as its price increases.
....COPYRIGHT ©️ 2025 ALL RIGHTS RESERVED...TRUSTED & VERIFIED 1
, What is the difference between a change in quantity demanded and a change in
demand? - --CORRECT ANSWER--A change in quantity demanded is a
movement along the demand curve that occurs because of a change in the good's
own price, while a change in demand reflects a shift of the entire demand curve
caused by a change in a determinant of demand other than the good's price.
What form do inverse supply and demand equations take? Why do economists
often represent supply and demand using the inverse equations? - --CORRECT
ANSWER--The inverse demand curve expresses the price of a product as a
function of quantity demanded. The inverse supply curve expresses the price of a
product as a function of quantity supplied. Expressing price as a function of
quantity makes the demand and supply choke prices more explicit.
Why is the supply curve upward-sloping? - --CORRECT ANSWER--The upward
slope of the supply curve reflects the fact that holding all else equal, producers
supply more of a good as its price increases.
What is the difference between a change in quantity supplied and a change in
supply? - --CORRECT ANSWER--A change in quantity supplied is a movement
along the supply curve that occurs because of a change in the good's own price,
while a change in supply reflects a shift of the entire supply curve caused by a
change in a determinant of supply other than the good's price.
Define market equilibrium. What is true of the quantity supplied and demanded at
the market equilibrium? - --CORRECT ANSWER--The market equilibrium occurs
....COPYRIGHT ©️ 2025 ALL RIGHTS RESERVED...TRUSTED & VERIFIED 2
