ECON 300 EXAM 1 UA WITH ALL CORRECT & 100%
VERIFIED ANSWERS|ACTUAL COMPLETE EXAM|
ALREADY GRADED A+
Factors (Determinants) of Supply ✔Correct Answer-o Price
o Suppliers cost of production
o The number of sellers
o Sellers outside option
• Factors (Determinants) of Demand ✔Correct Answer-o Price
o Number of Consumers
o Consumer income or wealth
o Consumer Tastes
o Price of other goods
• Supply and demand model key assumptions ✔Correct Answer-o S & D in a single market
o All goods in the market are identical
o All goods sold in the market sell for the same price, and everyone has the same info
o There are many producers and consumers in the market
• Interpreting supply and demand curves on a graph ✔Correct Answer-o The relationship between
the quantity of a good that consumers demand and the good's price, holding all other factors
constant
o Relationship between the quantity supplied of a good and it's price, holding all else constant
Supply, Shift versus movement along ✔Correct Answer-o Movement along Supply occurs as a
result of a change in goods price
o A shift of supply is caused by a change in a determinant other than price
▪ Shift to right= lower prices and higher quantity
▪ Shift to left= increased prices and decreased quantity
demand shift vs movement ✔Correct Answer-o Movement along Demand occurs as a result of a
change in the goods price
o A shift of Demand is caused by a change in a determinant other than the price
▪ Shift to right = Increase
▪ Shift to left = decrease
• Supply choke ✔Correct Answer-o The price at which no firm is willing to produce a good and
quantity supplied is zero
• Demand choke ✔Correct Answer-o The price at which no consumer is willing to buy a good and
quantity demanded is zero
Supply Curve Equation ✔Correct Answer-o Supply: Q=200P-200
Supply Choke= $1
Demand Curve Equation ✔Correct Answer-o Demand: Q= 1000-200P
, Demand Choke= $5
• Substitutes ✔Correct Answer-o A good that can be used in place of another good
i.e Coke vs Store Brand Cola
• Complements ✔Correct Answer-two goods that are bought and used together
i.e Peanut Butter and Jelly
Perfectly Elastic ✔Correct Answer-▪ Horizontal Line (forms E)
▪ Very Price sensitive
▪ Perfect Competition
▪ Examples- Internet service, cell phone service
- Equal to 0
Perfectly Inelastic ✔Correct Answer-▪ Vertical Line
▪ Not price sensitive
▪ No substitutes
Examples- Snake Anti-Venom, possibly gas
- Equal to infinite
Elastic ✔Correct Answer-Absolute Value greater than 1
inelastic ✔Correct Answer-Absolute Value less than 1
Unit Elastic ✔Correct Answer-Equal to 1
• Consumer surplus ✔Correct Answer-o Difference between the amount consumers would be
willing to pay for a good or service and the amount they actually pay
• Producer surplus ✔Correct Answer-o Price producers are willing to sell goods and the price they
actually receive
• Interpret CS or PS on a graph ✔Correct Answer-o Steeper demand curve the greater the
consumer surplus
o Signals high willingness to buy the good
o More options are available, consumers may move away from that good and CS falls
Calculate Consumer Surplus or PS ✔Correct Answer-CS&PS= 1/2 * Base * Height
Base= Equilibrium
Height= Equilibrium to peak
Transitivity ✔Correct Answer-the ability to logically combine relations to understand certain
conclusions
o For 3 bundles(A,B and C), if you prefer A to B and B to C, you also prefer A to C
o Does not mean you prefer A to C in all situations—only in that given moment
VERIFIED ANSWERS|ACTUAL COMPLETE EXAM|
ALREADY GRADED A+
Factors (Determinants) of Supply ✔Correct Answer-o Price
o Suppliers cost of production
o The number of sellers
o Sellers outside option
• Factors (Determinants) of Demand ✔Correct Answer-o Price
o Number of Consumers
o Consumer income or wealth
o Consumer Tastes
o Price of other goods
• Supply and demand model key assumptions ✔Correct Answer-o S & D in a single market
o All goods in the market are identical
o All goods sold in the market sell for the same price, and everyone has the same info
o There are many producers and consumers in the market
• Interpreting supply and demand curves on a graph ✔Correct Answer-o The relationship between
the quantity of a good that consumers demand and the good's price, holding all other factors
constant
o Relationship between the quantity supplied of a good and it's price, holding all else constant
Supply, Shift versus movement along ✔Correct Answer-o Movement along Supply occurs as a
result of a change in goods price
o A shift of supply is caused by a change in a determinant other than price
▪ Shift to right= lower prices and higher quantity
▪ Shift to left= increased prices and decreased quantity
demand shift vs movement ✔Correct Answer-o Movement along Demand occurs as a result of a
change in the goods price
o A shift of Demand is caused by a change in a determinant other than the price
▪ Shift to right = Increase
▪ Shift to left = decrease
• Supply choke ✔Correct Answer-o The price at which no firm is willing to produce a good and
quantity supplied is zero
• Demand choke ✔Correct Answer-o The price at which no consumer is willing to buy a good and
quantity demanded is zero
Supply Curve Equation ✔Correct Answer-o Supply: Q=200P-200
Supply Choke= $1
Demand Curve Equation ✔Correct Answer-o Demand: Q= 1000-200P
, Demand Choke= $5
• Substitutes ✔Correct Answer-o A good that can be used in place of another good
i.e Coke vs Store Brand Cola
• Complements ✔Correct Answer-two goods that are bought and used together
i.e Peanut Butter and Jelly
Perfectly Elastic ✔Correct Answer-▪ Horizontal Line (forms E)
▪ Very Price sensitive
▪ Perfect Competition
▪ Examples- Internet service, cell phone service
- Equal to 0
Perfectly Inelastic ✔Correct Answer-▪ Vertical Line
▪ Not price sensitive
▪ No substitutes
Examples- Snake Anti-Venom, possibly gas
- Equal to infinite
Elastic ✔Correct Answer-Absolute Value greater than 1
inelastic ✔Correct Answer-Absolute Value less than 1
Unit Elastic ✔Correct Answer-Equal to 1
• Consumer surplus ✔Correct Answer-o Difference between the amount consumers would be
willing to pay for a good or service and the amount they actually pay
• Producer surplus ✔Correct Answer-o Price producers are willing to sell goods and the price they
actually receive
• Interpret CS or PS on a graph ✔Correct Answer-o Steeper demand curve the greater the
consumer surplus
o Signals high willingness to buy the good
o More options are available, consumers may move away from that good and CS falls
Calculate Consumer Surplus or PS ✔Correct Answer-CS&PS= 1/2 * Base * Height
Base= Equilibrium
Height= Equilibrium to peak
Transitivity ✔Correct Answer-the ability to logically combine relations to understand certain
conclusions
o For 3 bundles(A,B and C), if you prefer A to B and B to C, you also prefer A to C
o Does not mean you prefer A to C in all situations—only in that given moment
