Econ 201 Latest Exam Questions With All Complete Answers Updated.

Supply Curve - Answer A curve that shows the relationship between the price of a product and the quantity of the product supplied. Positive sloping. Six things that shift supply curve: - Answer 1. Change in resources 2. change in technology 3. changes in taxes and subsidies 4. change in prices of other goods 5. change in producer expectation 6. change in number of suppliers Consumer Surplus - Answer the difference between the total amount that consumers are willing and able to pay for a good or service (indicated by the demand curve) and the total amount that they actually do pay (i.e. the market price). Producer Surplus - Answer The difference between the price received and the marginal cost of producing the good. It is the area above the supply curve and under the price Market Efficiency - Answer when a market is capable of producing output high enough to meet consumer demand Price Controls - Answer legal restrictions on how high or low a market price may go 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 When is a price ceiling effective? - Answer when the equilibrium price is above the price ceiling When is a price floor effective? - Answer when Price floor is greater than price equilibrium PF>PE