1
economics final Questions and
Answers (100% Correct Answers)
Already Graded A+
What is the opportunity cost? Ans: Value of 2nd best choice.
© 2026 Assignment
What are the questions that every economic system must
answer? Ans: - Who decides what to produce?
Guru01 - Stuvia
Expert
- Who decides how it is produced?
- Who decides who gets what is produced?
Traditional Economy Ans: relies on habit, custom, or ritual to
decide questions of production and consumption of goods and
services
command economy Ans: production, investment, prices, and
incomes are determined centrally by a government.
market economy Ans: decisions on production and
consumption of goods and services are based on voluntary
exchange in markets
Mixed economy Ans: Businesses, consumers, and government
influence production of goods; governmental regulations on
goods
What is allocation? Ans: process of distribution
, 2
What is the production possibilities frontier? Ans: Graph that
shows alternative ways that an economy can use its resources,
it shows the maximum output of an economy.
How can the production possibilities curve shift? Ans: If more
resources become available and if technology improves, an
economy can increase its level of output which shifts the PP
curve to the right.
What are the factors of production? Ans: Labor, land, capital,
entrepreneurship
© 2026 Assignment
Why does the demand curve descend? Ans: Substitution,
Guru01 - Stuvia
income, law of diminishing marginal utility
Expert
What causes demand to move up and down the production
curve? Ans: A change in price makes it move along the curve
up and down
What causes shifts in demand? Ans: Tastes, related goods
prices, income, buyers, expectations
What does it mean if a good's demand is inelastic? Ans:
Buyer's demand for a product does not change as much as its
changed in price.
What qualities do goods that have inelastic demand share?
Ans: Little to no substitutes, necessities
elasticity of demand formula Ans: % change in quantity
demanded / % change in price
What are the shifters of supply? Ans: subsidies and taxes,
technology, other related goods prices, resource costs,
expected future prices, size of market (STORES)
economics final Questions and
Answers (100% Correct Answers)
Already Graded A+
What is the opportunity cost? Ans: Value of 2nd best choice.
© 2026 Assignment
What are the questions that every economic system must
answer? Ans: - Who decides what to produce?
Guru01 - Stuvia
Expert
- Who decides how it is produced?
- Who decides who gets what is produced?
Traditional Economy Ans: relies on habit, custom, or ritual to
decide questions of production and consumption of goods and
services
command economy Ans: production, investment, prices, and
incomes are determined centrally by a government.
market economy Ans: decisions on production and
consumption of goods and services are based on voluntary
exchange in markets
Mixed economy Ans: Businesses, consumers, and government
influence production of goods; governmental regulations on
goods
What is allocation? Ans: process of distribution
, 2
What is the production possibilities frontier? Ans: Graph that
shows alternative ways that an economy can use its resources,
it shows the maximum output of an economy.
How can the production possibilities curve shift? Ans: If more
resources become available and if technology improves, an
economy can increase its level of output which shifts the PP
curve to the right.
What are the factors of production? Ans: Labor, land, capital,
entrepreneurship
© 2026 Assignment
Why does the demand curve descend? Ans: Substitution,
Guru01 - Stuvia
income, law of diminishing marginal utility
Expert
What causes demand to move up and down the production
curve? Ans: A change in price makes it move along the curve
up and down
What causes shifts in demand? Ans: Tastes, related goods
prices, income, buyers, expectations
What does it mean if a good's demand is inelastic? Ans:
Buyer's demand for a product does not change as much as its
changed in price.
What qualities do goods that have inelastic demand share?
Ans: Little to no substitutes, necessities
elasticity of demand formula Ans: % change in quantity
demanded / % change in price
What are the shifters of supply? Ans: subsidies and taxes,
technology, other related goods prices, resource costs,
expected future prices, size of market (STORES)
