BUSINESS ECONOMICS EXAM |
QUESTIONS AND ANSWERS | LATEST
EXAM 2026-2027 | GRADED A+
ECONOMICS -ANSWER The study of how society manages its scarce resources.
SCARCITY -ANSWER Of a limited nature (not enough for everyone)
INCENTIVE -ANSWER Something that induces a person to act. A reason to act.
OPPORTUNITY COST -ANSWER the cost of something is what you give up to get it
MARGIN -ANSWER In economics, a margin is a set of constraints conceptualised as a
border. A marginal change is the change associated with a relaxation or tightening of
constraints — either change of the constraints, or a change in response to this change
of the constraints.
Trade Off -ANSWER situation that involves losing one quality or aspect of something in
return for gaining another quality or aspect
Business economics -ANSWER Field in economics that deals with issues such as
business organization, management, expansion and strategy.
Market -ANSWER A group of buyers and sellers of a particular good or service
Buyers -ANSWER (As a group) determine the demand of a product or service
Sellers -ANSWER (As a group) determine the supply of a product or service
Competitive Market -ANSWER A market in which there are many buyers and sellers so
that each has a negligible impact on the market place
Price Takers -ANSWER Price takers accept whatever the market price happens to be.
They have no market power to charge a different price because its many free-entry
competitors are selling identical products. They face a typically horizontal demand
curve.
Monopoly -ANSWER One entity controls all of a good or service in a market
Demand -ANSWER A relationship between market price and quantities of goods and
services purchased in a given period of time
Represents the behavior of buyers in the market place
,Quantity Demanded -ANSWER The amount of a good that buyers are willing and able to
purchase
Demand schedule -ANSWER A table that shows the relationship between the price of a
good and the quantity demanded
Law of Demand -ANSWER The claim that, other things equal, the quantity demanded of
a good falls when the price of the good rises
Demand curve -ANSWER The relationship between price and quantity demanded
A graph of the relationship between the price of a good and the quantity demanded
Market Demand -ANSWER The sum up of all the individual demands for a particular
good or service
Normal good -ANSWER A good for which, other things equal, an increase in income
leads to an increase in demand
Inferior Good -ANSWER A good for which, other things equal, an increase in income
leads to a decrease in demand
Substitutes -ANSWER Two goods for which an increase in the price of one leads to an
increase in the demand for the other
Complements -ANSWER Two goods for which an increase in the price of one leads to
decrease in the demand for the other
Giffen good -ANSWER Typically an inferior product that does not have easily available
substitutes, as a result of which the income effect dominates the substitution effect
Veblen goods -ANSWER Types of material commodities for which the demand is
proportional to its high price, which is an apparent contradiction of the law of demand
Supply -ANSWER A relationship between market price and quantities of goods and
services made available for sale in a given period of time
Represents the behavior of sellers in the market place
Quantity Supplied -ANSWER The amount of a good that sellers are willing and able to
sell
Law of supply -ANSWER The claim that, other things equal, the quantity supplied of a
good rises when the price of the good rises
, Supply Schedule -ANSWER A table that shows the relationship between the price of a
good and the quantity supplied
Supply Curve -ANSWER The relationship between price and quantity supplied
A graph of the relationship between the price of a good and the quantity supplied
Market supply -ANSWER The sum up of all individual supplies
Equilibrium (Market Equilibrium) -ANSWER Equal balance between any powers,
influences, etc. equality of effect.
A situation in which the market price has reached the level at which quantity supplied
equals quantity demanded
Equilibrium Price -ANSWER The price that balances quantity supplied and quantity
demanded
Equilibrium Quantity -ANSWER The quantity supplied and the quantity demanded at the
equilibrium price
Surplus -ANSWER A situation in which quantity supplied is greater than quantity
demanded
Shortage -ANSWER A situation in which quantity demanded is greater than quantity
supplied
Law of Supply and Demand -ANSWER The claim that the price of any good adjusts to
bring the quantity supplied and the quantity demanded for that good into balance
Elasticity -ANSWER A measure of the responsiveness of quantity demanded or quantity
supplied to a change in one of its determinants
Price of Elasticity Demand -ANSWER A measure of how much the quantity demanded of
a good responds to a change in the price of that good, computed as the percentage
change in quantity demanded divided by the percentage change in price
The Midpoint Method -ANSWER A better way to calculate percentage changes and
elasticities
Total Revenue -ANSWER The amount paid by buyers and received by sellers of a good
Computed as the price of the good times the quantity sold
Income Elasticity of Demand -ANSWER A measure of how much the quantity demanded
of a good responds to a change in consumers' income
QUESTIONS AND ANSWERS | LATEST
EXAM 2026-2027 | GRADED A+
ECONOMICS -ANSWER The study of how society manages its scarce resources.
SCARCITY -ANSWER Of a limited nature (not enough for everyone)
INCENTIVE -ANSWER Something that induces a person to act. A reason to act.
OPPORTUNITY COST -ANSWER the cost of something is what you give up to get it
MARGIN -ANSWER In economics, a margin is a set of constraints conceptualised as a
border. A marginal change is the change associated with a relaxation or tightening of
constraints — either change of the constraints, or a change in response to this change
of the constraints.
Trade Off -ANSWER situation that involves losing one quality or aspect of something in
return for gaining another quality or aspect
Business economics -ANSWER Field in economics that deals with issues such as
business organization, management, expansion and strategy.
Market -ANSWER A group of buyers and sellers of a particular good or service
Buyers -ANSWER (As a group) determine the demand of a product or service
Sellers -ANSWER (As a group) determine the supply of a product or service
Competitive Market -ANSWER A market in which there are many buyers and sellers so
that each has a negligible impact on the market place
Price Takers -ANSWER Price takers accept whatever the market price happens to be.
They have no market power to charge a different price because its many free-entry
competitors are selling identical products. They face a typically horizontal demand
curve.
Monopoly -ANSWER One entity controls all of a good or service in a market
Demand -ANSWER A relationship between market price and quantities of goods and
services purchased in a given period of time
Represents the behavior of buyers in the market place
,Quantity Demanded -ANSWER The amount of a good that buyers are willing and able to
purchase
Demand schedule -ANSWER A table that shows the relationship between the price of a
good and the quantity demanded
Law of Demand -ANSWER The claim that, other things equal, the quantity demanded of
a good falls when the price of the good rises
Demand curve -ANSWER The relationship between price and quantity demanded
A graph of the relationship between the price of a good and the quantity demanded
Market Demand -ANSWER The sum up of all the individual demands for a particular
good or service
Normal good -ANSWER A good for which, other things equal, an increase in income
leads to an increase in demand
Inferior Good -ANSWER A good for which, other things equal, an increase in income
leads to a decrease in demand
Substitutes -ANSWER Two goods for which an increase in the price of one leads to an
increase in the demand for the other
Complements -ANSWER Two goods for which an increase in the price of one leads to
decrease in the demand for the other
Giffen good -ANSWER Typically an inferior product that does not have easily available
substitutes, as a result of which the income effect dominates the substitution effect
Veblen goods -ANSWER Types of material commodities for which the demand is
proportional to its high price, which is an apparent contradiction of the law of demand
Supply -ANSWER A relationship between market price and quantities of goods and
services made available for sale in a given period of time
Represents the behavior of sellers in the market place
Quantity Supplied -ANSWER The amount of a good that sellers are willing and able to
sell
Law of supply -ANSWER The claim that, other things equal, the quantity supplied of a
good rises when the price of the good rises
, Supply Schedule -ANSWER A table that shows the relationship between the price of a
good and the quantity supplied
Supply Curve -ANSWER The relationship between price and quantity supplied
A graph of the relationship between the price of a good and the quantity supplied
Market supply -ANSWER The sum up of all individual supplies
Equilibrium (Market Equilibrium) -ANSWER Equal balance between any powers,
influences, etc. equality of effect.
A situation in which the market price has reached the level at which quantity supplied
equals quantity demanded
Equilibrium Price -ANSWER The price that balances quantity supplied and quantity
demanded
Equilibrium Quantity -ANSWER The quantity supplied and the quantity demanded at the
equilibrium price
Surplus -ANSWER A situation in which quantity supplied is greater than quantity
demanded
Shortage -ANSWER A situation in which quantity demanded is greater than quantity
supplied
Law of Supply and Demand -ANSWER The claim that the price of any good adjusts to
bring the quantity supplied and the quantity demanded for that good into balance
Elasticity -ANSWER A measure of the responsiveness of quantity demanded or quantity
supplied to a change in one of its determinants
Price of Elasticity Demand -ANSWER A measure of how much the quantity demanded of
a good responds to a change in the price of that good, computed as the percentage
change in quantity demanded divided by the percentage change in price
The Midpoint Method -ANSWER A better way to calculate percentage changes and
elasticities
Total Revenue -ANSWER The amount paid by buyers and received by sellers of a good
Computed as the price of the good times the quantity sold
Income Elasticity of Demand -ANSWER A measure of how much the quantity demanded
of a good responds to a change in consumers' income
