ECON 2110 Exam 1 | Latest set |
Questions and verified Answers
incentive - ANSW-rewards and penalties that motivate behavior
opportunity cost - ANSW-of a choice, value of the opportunities lost
inflation - ANSW-increase in the general level of prices
absolute advantage - ANSW-the ability to produce the same good using fewer inputs than another
producer
production possibilities frontier - ANSW-shows all the combinations of goods that a country can produce
given its productivity and supply of inputs
comparative advantage - ANSW-country has this in producing goods for which it has the lowest
opportunity cost
demand curve - ANSW-function that shows the quantity demanded at different prices
quantity demanded - ANSW-the quantity that buyers are willing and able to buy at a particular price
consumer surplus - ANSW-the consumers gain from exchange, or the difference between the maximum
price a consumer is willing to pay for a certain quantity and the market price
total consumer surplus - ANSW-measured by the area beneath the demand curve and above the price
normal good - ANSW-a good for which demand increases when income increases
inferior good - ANSW-a good for which demand decreases when income increases
substitutes - ANSW-a decrease in the price of one good leads to a decrease in demand for the other
good
compliments - ANSW-a decrease in price of one good leads to an increase in the demand for the other
good
supply curve - ANSW-a function that shows quantity supplied at different prices
quantity supplied - ANSW-the amount of a good that sellers are willing and able to sell at a particular
price
producer surplus - ANSW-the producers gain from exchange, or the difference between the market price
and the minimum price at which a producer would be willing to sell a particular quantity
total producer surplus - ANSW-measured by area above the supply curve and below the price
surplus - ANSW-a situation in which the quantity supplied is greater than the quantity demanded
shortage - ANSW-a situation in which the quantity demanded is greater than the quantity supplied
equilibrium price - ANSW-the price at which the quantity demanded is equal to the quantity supplied
equilibrium quantity - ANSW-the quantity at which the quantity demanded is equal to the quantity
supplied
Questions and verified Answers
incentive - ANSW-rewards and penalties that motivate behavior
opportunity cost - ANSW-of a choice, value of the opportunities lost
inflation - ANSW-increase in the general level of prices
absolute advantage - ANSW-the ability to produce the same good using fewer inputs than another
producer
production possibilities frontier - ANSW-shows all the combinations of goods that a country can produce
given its productivity and supply of inputs
comparative advantage - ANSW-country has this in producing goods for which it has the lowest
opportunity cost
demand curve - ANSW-function that shows the quantity demanded at different prices
quantity demanded - ANSW-the quantity that buyers are willing and able to buy at a particular price
consumer surplus - ANSW-the consumers gain from exchange, or the difference between the maximum
price a consumer is willing to pay for a certain quantity and the market price
total consumer surplus - ANSW-measured by the area beneath the demand curve and above the price
normal good - ANSW-a good for which demand increases when income increases
inferior good - ANSW-a good for which demand decreases when income increases
substitutes - ANSW-a decrease in the price of one good leads to a decrease in demand for the other
good
compliments - ANSW-a decrease in price of one good leads to an increase in the demand for the other
good
supply curve - ANSW-a function that shows quantity supplied at different prices
quantity supplied - ANSW-the amount of a good that sellers are willing and able to sell at a particular
price
producer surplus - ANSW-the producers gain from exchange, or the difference between the market price
and the minimum price at which a producer would be willing to sell a particular quantity
total producer surplus - ANSW-measured by area above the supply curve and below the price
surplus - ANSW-a situation in which the quantity supplied is greater than the quantity demanded
shortage - ANSW-a situation in which the quantity demanded is greater than the quantity supplied
equilibrium price - ANSW-the price at which the quantity demanded is equal to the quantity supplied
equilibrium quantity - ANSW-the quantity at which the quantity demanded is equal to the quantity
supplied
