Fundamentals of Economics Ivy Software
UPDATED ACTUAL Questions and
CORRECT Answers
Factors of Production - CORRECT ANSWER - Encompass all productive resources used
to produce goods and services. Land, Labor, Capital, Entrepreneurial Ability
Opportunity Cose - CORRECT ANSWER - What you give up to get something
Production Possibilities Frontier - CORRECT ANSWER - A model of a two- good
economy that shows how much the economy can produce using all its factors of production
effeciently
Increasing Opportunity Cost - CORRECT ANSWER - As more and more of an economy's
factors of production are employed in the production of a good, the economy must sacrifice the
production of other goods at an increasing rate
Absolute Advantage - CORRECT ANSWER - One has the lowest production cost relative
with whom they're being compared
Comparative Advantage - CORRECT ANSWER - One has the lowest opportunity cost
relative with whom they're being compared
Demand Schedule - CORRECT ANSWER - A table showing the relationship between
price and the quantity of a good that buyers are willing to buy
Demand Curve - CORRECT ANSWER - A picture of the way an individual responds to
changing prices of a good
, Demand Function - CORRECT ANSWER - A relationship between independent demand
variables, such as the price of good X and the price of a substitute good Y, and the dependent
variable, the quantity demanded of good X.
Law of Demand - CORRECT ANSWER - As the price of a good increases, ceteris
paribus, the quantity demanded of the good decreases.
Market Demand Curve - CORRECT ANSWER - The horizontal summation of individual
demand curves yields the market demand curve.
Market Demand Schedule - CORRECT ANSWER - The market demand schedule is a
table that is calculated by summing up how many units of a good buyers are willing to purchase
at every market price.
Price Elasticity of Demand - CORRECT ANSWER - A measure of the relationship
between a percentage change in the market price of product and a consequential percentage
change in the quantity demanded of a product
Cross Price Elasticity of Demand - CORRECT ANSWER - A measure of the relationship
between a percentage change in the market price of product X and a consequential percentage
change in the quantity demanded of product Y
Income Elasticity of Deman - CORRECT ANSWER - A measure of the relationship
between a percentage change in income and a consequential percentage change in the quantity
demanded of a product.
Supply Schedule - CORRECT ANSWER - A table showing the relationship between price
and the quantity of a good that sellers are willing to produce.
Supply Curve - CORRECT ANSWER - A picture of the way in which a producer
responds to changing market prices of a good.
UPDATED ACTUAL Questions and
CORRECT Answers
Factors of Production - CORRECT ANSWER - Encompass all productive resources used
to produce goods and services. Land, Labor, Capital, Entrepreneurial Ability
Opportunity Cose - CORRECT ANSWER - What you give up to get something
Production Possibilities Frontier - CORRECT ANSWER - A model of a two- good
economy that shows how much the economy can produce using all its factors of production
effeciently
Increasing Opportunity Cost - CORRECT ANSWER - As more and more of an economy's
factors of production are employed in the production of a good, the economy must sacrifice the
production of other goods at an increasing rate
Absolute Advantage - CORRECT ANSWER - One has the lowest production cost relative
with whom they're being compared
Comparative Advantage - CORRECT ANSWER - One has the lowest opportunity cost
relative with whom they're being compared
Demand Schedule - CORRECT ANSWER - A table showing the relationship between
price and the quantity of a good that buyers are willing to buy
Demand Curve - CORRECT ANSWER - A picture of the way an individual responds to
changing prices of a good
, Demand Function - CORRECT ANSWER - A relationship between independent demand
variables, such as the price of good X and the price of a substitute good Y, and the dependent
variable, the quantity demanded of good X.
Law of Demand - CORRECT ANSWER - As the price of a good increases, ceteris
paribus, the quantity demanded of the good decreases.
Market Demand Curve - CORRECT ANSWER - The horizontal summation of individual
demand curves yields the market demand curve.
Market Demand Schedule - CORRECT ANSWER - The market demand schedule is a
table that is calculated by summing up how many units of a good buyers are willing to purchase
at every market price.
Price Elasticity of Demand - CORRECT ANSWER - A measure of the relationship
between a percentage change in the market price of product and a consequential percentage
change in the quantity demanded of a product
Cross Price Elasticity of Demand - CORRECT ANSWER - A measure of the relationship
between a percentage change in the market price of product X and a consequential percentage
change in the quantity demanded of product Y
Income Elasticity of Deman - CORRECT ANSWER - A measure of the relationship
between a percentage change in income and a consequential percentage change in the quantity
demanded of a product.
Supply Schedule - CORRECT ANSWER - A table showing the relationship between price
and the quantity of a good that sellers are willing to produce.
Supply Curve - CORRECT ANSWER - A picture of the way in which a producer
responds to changing market prices of a good.
