Exam (elaborations)

Eco 3301 Test 1 || with 100% Error-free Answers.

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Course
Eco 3301

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Eco 3301

Supply Curve correct answers Shows the quantity of a good the producers are willing to sell at a given price If production costs falls, firms can produce the same quantity at a __________ price, and a larger quantity at the ______ price correct answers Lower; same Demand Curve correct answers...

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supply curve

Institution Eco 3301
Course Eco 3301

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Eco 3301 Test 1 || with 100% Error-free Answers.
Supply Curve correct answers Shows the quantity of a good the producers are willing to sell at a
given price

If production costs falls, firms can produce the same quantity at a __________ price, and a larger
quantity at the ______ price correct answers Lower; same

Demand Curve correct answers Shows how much of a good consumers are willing to buy as the
price per unit changes

Consumers buy _______ if the price goes down correct answers More

Quantity of goods consumers are willing to buy can depend of other things such as _______
correct answers icnome

With greater income, consumers can spend ______ on goods correct answers more

Goods are ______________ when increases in the price of one leads to a decrease in the quantity
demanded of the other correct answers substitutes

Goods are _____________ when an increase in the price of one leads to a decrease in the
quantity demanded of the other correct answers Compliments

Surplus correct answers a situation in which Qs exceeds Qd

Shortage correct answers a situation where Qd exceeds Qs

Elasticity correct answers the % change that will occur in one variable in response to a 1%
increase in another variable

Price Elasticity of Demand correct answers Pe>1; Elastic
Pe<1; Inelastic

When there are close substitutes, a price increase will cause the consumer to buy less of the good
and more of the substitute. Demand will then be..... correct answers Elastic

When there are no substitutes, demand will tend to be.... correct answers Inelastic

Principles that consumers will buy as much of a good as they can get at a single price, but any
higher price the Qd drops to zero, while at any lower price the Qd increases without limits
correct answers Infinitely Elastic Demand

Principles that consumers will buy a fixed quantity of a good regardless of its price correct
answers Completely Inelastic Demand

, Income Elasticity correct answers % change in Qd resulting in a 1% increase in income

Cross Price Elasticity correct answers % change in the Qd of one good resulting from a 1%
increase in the price of another good

Positive Cross Price Elasticity= correct answers Substitutes

Negative Cross Price Elasticity= correct answers Complements

Income Effect correct answers Prices go up, money doesn't have as much buying power

Substitution Effect correct answers Price of one good goes up, by cheaper substitutes

The Law of Demand (Inverse Relationship) correct answers If prices go up, the quantity
demanded decreases

Things Held Constant on One Demand Curve correct answers 1. Income
2. Price + Quantity of Related goods (i.e... substitutes and complements)
3. Tastes and Preferences
4. Size of Potential Market
5. Taxes and Government Regulation (Deregulation Increases Demand....Regulation Decreases
Demand.... Taxes go up demand goes down.... Taxes go down demand goes up)

Normal and Inferior Goods correct answers Normal Goods:
income Increases, demand Increases
Income decreases, demand decrease.

Inferior Goods:
Incomes increases, demand decreases
Income decreases, demand increases

The Law of Supply (Direct Relationship) correct answers If the price of a good increases, the Qs
increases

Things Held Constant on a Supply Curve correct answers 1. Input Costs (P Increases Q
Decrease; P Decrease and Q Increase)
2. Acts of God
3. Technology
4. Number of Suppliers
5. Taxes and Government Regulationface

What Effects Change in Quantity Demanded and Change in Quantity Supplied (Change in
Quantity being Change Along the Curve) correct answers Price

Elastic Goods have lots of ________ and are a _________ portion of your budget correct
answers substitutes; large

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