Econ 202 Midterm (Hayes)
Study online at https://quizlet.com/_76rx6y
1. Opportunity cost - know -The amount of other products that must be forgone or sacrificed to
its definition and under- produce a unit of a product
stand the law of increasing -As the production of a good increases, the opportunity cost of
opportunity costs producing an addition unit rises
2. What does "other things The assumption that factors other than being considered are held
equal" mean? constant
3. What are microeconom- The part of economics concerned with (1) decision making by in-
ics? dividual units such as a household, a firm, or an industry and (2)
individual markets, specific goods and services, and product and
resource prices
4. What does utility mean? The want-satisfying power of good or service; the satisfaction or
pleasure a consumer obtains from the consumption of a good or
service
5. Understand the produc- A curve showing the different combinations of two goods or services
tion possibilities frontier; that can be produced in a full-employment, full-production economy
how is it illustrated? where the available supplies of resources and technology are fixed.
-Productions Possibilities table lists the different combinations of
two products that can be produced with a specific set of resources,
assuming full employment
6. What is the demand curve A curve that illustrates the demand for a product by showing how
- what does it show? How each possible price (on the vertical axis) is associated with a specific
is market demand de- quantity demanded (on the horizontal axis)
rived? -By adding the quantities demanded by all consumers at each of the
various possible prices
7. When the price of a good - A change in the quantity demanded of a consumer good that results
rises how does the substi- from a change in its relative expensiveness caused by a change in the
tution effect operate in de- good's own price
1/6
, Econ 202 Midterm (Hayes)
Study online at https://quizlet.com/_76rx6y
termining the new quanti- -A change in the quantity demanded of a product that results from
ty demanded? The income the change in real income (purchasing power) caused by a change
effect? in the product's price
8. What are the determi- income, trends and tastes, prices of related goods, expectations as
nants of demand (fac- well as the size and composition of the population
tors that shift the demand
curve)?
9. What is the supply curve A curve that illustrates the supply for a product by showing how
and why is it upward slop- each possible price (on the vertical axis) is associated with a specific
ing? quantity supplied (on the horizontal axis)
- It reflects the law of supply-producers offer more a good, service,
or resource for sale as its price rises
10. What are the determi- resource prices, technology, taxes and subsidies, prices of other
nants of supply and what goods, producer expectations, and the number of sellers in the
happens to supply when -increases or decreases
these factors change?
11. What happens to quanti- -When prices fall, demand rises, When prices rise, demand decreas-
ty demanded when price es
changes? Demand? What -When prices fall, supply increases, When prices rise supply decreas-
happens to supply when es
price changes? Quantity
supplied?
12. Understand the concept The second Big Mac will yield less satisfaction to the consumer than
of diminishing marginal the first, and the third still less than the second
utility and know that the
demand curve can also be
called the marginal ben-
2/6
Study online at https://quizlet.com/_76rx6y
1. Opportunity cost - know -The amount of other products that must be forgone or sacrificed to
its definition and under- produce a unit of a product
stand the law of increasing -As the production of a good increases, the opportunity cost of
opportunity costs producing an addition unit rises
2. What does "other things The assumption that factors other than being considered are held
equal" mean? constant
3. What are microeconom- The part of economics concerned with (1) decision making by in-
ics? dividual units such as a household, a firm, or an industry and (2)
individual markets, specific goods and services, and product and
resource prices
4. What does utility mean? The want-satisfying power of good or service; the satisfaction or
pleasure a consumer obtains from the consumption of a good or
service
5. Understand the produc- A curve showing the different combinations of two goods or services
tion possibilities frontier; that can be produced in a full-employment, full-production economy
how is it illustrated? where the available supplies of resources and technology are fixed.
-Productions Possibilities table lists the different combinations of
two products that can be produced with a specific set of resources,
assuming full employment
6. What is the demand curve A curve that illustrates the demand for a product by showing how
- what does it show? How each possible price (on the vertical axis) is associated with a specific
is market demand de- quantity demanded (on the horizontal axis)
rived? -By adding the quantities demanded by all consumers at each of the
various possible prices
7. When the price of a good - A change in the quantity demanded of a consumer good that results
rises how does the substi- from a change in its relative expensiveness caused by a change in the
tution effect operate in de- good's own price
1/6
, Econ 202 Midterm (Hayes)
Study online at https://quizlet.com/_76rx6y
termining the new quanti- -A change in the quantity demanded of a product that results from
ty demanded? The income the change in real income (purchasing power) caused by a change
effect? in the product's price
8. What are the determi- income, trends and tastes, prices of related goods, expectations as
nants of demand (fac- well as the size and composition of the population
tors that shift the demand
curve)?
9. What is the supply curve A curve that illustrates the supply for a product by showing how
and why is it upward slop- each possible price (on the vertical axis) is associated with a specific
ing? quantity supplied (on the horizontal axis)
- It reflects the law of supply-producers offer more a good, service,
or resource for sale as its price rises
10. What are the determi- resource prices, technology, taxes and subsidies, prices of other
nants of supply and what goods, producer expectations, and the number of sellers in the
happens to supply when -increases or decreases
these factors change?
11. What happens to quanti- -When prices fall, demand rises, When prices rise, demand decreas-
ty demanded when price es
changes? Demand? What -When prices fall, supply increases, When prices rise supply decreas-
happens to supply when es
price changes? Quantity
supplied?
12. Understand the concept The second Big Mac will yield less satisfaction to the consumer than
of diminishing marginal the first, and the third still less than the second
utility and know that the
demand curve can also be
called the marginal ben-
2/6
