ECO 2023: Exam 1 || with Complete Solutions.

Scarcity correct answers The limited nature of society's resources Economics correct answers The study of how society manages its scarce resources; how to optimize and maximize usage of resources Perfectly Competitive Market correct answers Many buyers and sellers; no one seller can impact market Quantity Demanded correct answers Amount of a good buyers are able and willing to purchase Law of Demand correct answers All other things equal, as price rises, quantity falls Demand Schedule correct answers Table form; Relationship between price of a good and the quantity demanded Demand Curve correct answers Graph form; Relationship between price of a good and the quantity demanded Increase in demand correct answers Any change that increases the quantity demanded at EVERY PRICE; curve shifts RIGHT Decrease in demand correct answers Any change that decreases the quantity demanded at EVERY PRICE; curve shifts LEFT Normal Good correct answers Other things equal, an increase in income causes an increase in demand (shift RIGHT) (Ex. Smartphones) Inferior Good correct answers Other things equal, an increase in income causes a decrease in demand (shift LEFT) (Ex. Ramen Noodles) Substitute Goods correct answers Replacement; increase in price of one leads to increase in demand for the other (Ex. Fancy Feast v. Friskies) Complement Goods correct answers "Go together" goods; increase in price of one leads to decrease in demand for the other (Ex. Coffee and Cream) Quantity Supplied correct answers Amount of a good sellers are willing and able to sell Law of Supply correct answers Other things equal, a rise in price causes a rise in quantity supplied Increase in Supply correct answers Any change that increases the quantity supplied at EVERY PRICE; shift RIGHT