ECON 100 Final Exam Study Guide with Complete Solutions

ECON 100 Final Exam Study Guide with Complete Solutions Economics - Answer️️ -The study of how best to allocate scarce resources among competing uses Opportunity cost - Answer️️ -The most desired goods and services that are forgone in order to obtain something else Three Economic Questions - Answer️️ -WHAT to produce (PPC), HOW to produce, FOR WHOM to produce Production Possibilities Curve - Answer️️ -The alternative combination of goods and services that could be produced in a given time period with all available resources and technology (2 goods max) Operating with the PPC - Answer️️ -On the PPC: Efficient Outside: Unreasonable Inside: Inefficient Market Failure - Answer️️ -Market mechanism generates suboptimal economic outcomes Government Failure - Answer️️ -Occurs when a government intervention fails to improve or worsen economic outcomes TITLE: EMILLYCHARLOTTE 2024/2025 ACADEMIC PERIOD OWNER: EMILLYCHARLOTTE COPYRIGHT STATEMENT: ©2024 EMILLYCHARLOTTE. ALL RIGHTS RESERVED FIRST PUBLISHED: SEPTEMBER 2024 2/6 Macroeconomics - Answer️️ -The study of the economy as a whole and the behavior of the entire economy Microeconomics - Answer️️ -The study of individual behavior in the economy, of the components of the larger economy Factor Market - Answer️️ -Any place where factors of production are bought and sold Product Market - Answer️️ -Any place where finished goods and services are bought and sold Supply - Answer️️ -The quantities of a good or service that producers are willing and able to sell at all possible prices during a given time period, ceteris paribus Demand - Answer️️ -The quantity of goods or services that buyers(consumers) are willing and able to buy at all possible prices during a given period of time, ceteris paribus Supply Curve - Answer️️ -Always upward sloping Demand Curve - Answer️️ -Always downward sloping b/s as the price of a good or service falls, people tend to purchase more of that good or service Law of Demand - Answer️️ -The quantity demanded of good or service increases as the price decreases, and vice versa, ceteris paribus Market Demand - Answer️️ -The total quantities of a good or service people are willing and able to buy at alternative prices in a given time period Market Supply - Answer️️ -Sum of individual supplies TITLE: EMILLYCHARLOTTE 2024/2025 ACADEMIC PERIOD OWNER: EMILLYCHARLOTTE COPYRIGHT STATEMENT: ©2024 EMILLYCHARLOTTE. ALL RIGHTS RESERVED FIRST PUBLISHED: SEPTEMBER 2024 3/6 Law of diminishing marginal utility - Answer️️ -The additional satisfaction (marginal utility) associated with consuming additional units of the same product in a given amount of time eventually declines Determinants of Demand - Answer️️ -Preferences/tastes, income, number of buyers, expectations, related/complementary goods Determinants of Supply - Answer️️ -Technology, factor costs, number of sellers, expectations, related goods, taxes and subsidies Change in demand/supply - Answer️️ -A change in one or more of the determinants of demand/supply will cause the curve to shift (NOT the price) Change in quantity demanded supply - Answer️️ -A change in price will be displayed as a movement along the curve Changes in equilibrium - Answer️️ -A shift in either the dem