Economics 115 Final UPDATED Actual Exam Questions and CORRECT Answers
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Economics 115
Institution
Economics 115
Economics 115 Final UPDATED Actual
Exam Questions and CORRECT Answers
opportunity cost - CORRECT ANSWER- the value of the next best choice
law of demand - CORRECT ANSWER- as the price of a good increases, consumers'
demand for that good should decrease
Economics 115 Final UPDATED Actual
Exam Questions and CORRECT Answers
opportunity cost - CORRECT ANSWER- ✔✔the value of the next best choice
law of demand - CORRECT ANSWER- ✔✔as the price of a good increases, consumers'
demand for that good should decrease
complement good - CORRECT ANSWER- ✔✔a good that is purchased and used in
combination with another good; when the price of this good goes up the quantity demanded
of the complement goes down
inferior good - CORRECT ANSWER- ✔✔goods that become less demanded as income
increases
consumer surplus - CORRECT ANSWER- ✔✔the buyers' benefit of being in the market, the
total willingness to pay minus the amount that is actually paid by the consumer
substitute good - CORRECT ANSWER- ✔✔a good that can be used in place of another good
demand curve - CORRECT ANSWER- ✔✔the relationship between the quantity of a good
that is demanded and the good's price holding all other factors constant (q=a-bp)
supply curve - CORRECT ANSWER- ✔✔the relationship between the quantity supplied of a
good and the good's price, holding all other factors constant
surplus - CORRECT ANSWER- ✔✔the amount by which quantity supplied exceed quantity
demanded when market price is higher than the equilibrium price
, shortage - CORRECT ANSWER- ✔✔the amount by which quantity demanded exceeds
quantity supplied when market price is lower than the equilibrium price
price elasticity of demand - CORRECT ANSWER- ✔✔the percentage change in quantity
demanded resulting from a 1% change in price
elastic - CORRECT ANSWER- ✔✔a price elasticity with an absolute value greater than 1
inelastic - CORRECT ANSWER- ✔✔a price elasticity with an absolute value less than 1
unit elastic - CORRECT ANSWER- ✔✔a price elasticity with an absolute value of 1
perfectly inelastic - CORRECT ANSWER- ✔✔price elasticity of 0 meaning there is no
change in quantity demanded or supplied for any change in price
perfectly elastic - CORRECT ANSWER- ✔✔price elasticity of infinity meaning any change
in price leads to an infinite change in quantity demanded or supplied
normal good - CORRECT ANSWER- ✔✔a good for which quantity demanded increases
when income rises
producer surplus - CORRECT ANSWER- ✔✔the difference between the price at which
producers are willing to sell their good or service and the price they actually receive
price ceiling - CORRECT ANSWER- ✔✔a price regulation that sets the highest price that
can be paid legally for a good or service
deadweight loss (DWL) - CORRECT ANSWER- ✔✔the reduction in total surplus that
occurs as a result of a market inefficiency
price floor - CORRECT ANSWER- ✔✔a price regulation that sets the lowest price that can
be paid legally for a good or service
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