Econ 101 Midterm Exam 1 Questions And All Correct Answers.
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Course
Econ 101
Institution
Econ 101
what is economics? - Answer study of how a society manages its scarce resources
resources - Answer input, factors of production
economy's resources - Answer 1. labor
2. capital
3. natural resources
4. entrepreneurial ability
labor - Answer physical capital (machines, buildings, ...
, market - Answer any place where supply and demand come together
Production Possibility Curve/Frontier - Answer graph showing various combos of output that economy
can produce given its resources & tech
opportunity cost - Answer what you give up to get a specific item
demand - Answer how much of a good customers are able/willing to purchase at all possible prices
quantity of demand - Answer how much of a good customers are able and willing to purchase at a
particular price (point on demand curve)
law of demand - Answer Cetirus peribus: as prices go up, quantity of demand goes down (holding
everything else constant)
movement on the demand/supply curve - Answer change in quantity of demand due to change in price
shift on the demand curve - Answer when entire curve shifts right or left, its due to a change in
demand. it is also effected by # of buyers, substitutes, and income
Changes due to Income - Answer Normal Goods: as income goes up, demand goes up (manicures)
Inferior Goods: as income goes up, demand goes down (bus rides)
Changes due to Price of Related Goods - Answer Subsitutes: as the price of Coke goes up, the demand
goes up for Pepsi
Compliments: as the price for beer goes up, demand for nachos goes down
supply - Answer amount of a good sellers are able & willing to supply at all possible prices
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