ECO 2023 Final Exam USF Review UPDATED ACTUAL QUESTIONS AND
CORRECT ANSWERS
Demand Consumer willingness and ability to buy products
Supply The quantity of something that producers have available for sale
quantity demanded the amount of a good that buyers are willing and able to purchase
, quantity supplied the amount of a good that sellers are willing and able to sell
change in demand/supply shift of the whole demand/supply curve
change in quantity demanded/supplied shift of point on the demand/supply curve
Determinants of Demand Taste, Income, Price related products, Number of customers
Determinants of Supply Resource Prices, Technological Advances, Taxes and Subsidies, Prices of Other
Goods, Price Expectations (the producer expects), Number of Sellers
normal good as income rises, demand increases for it
inferior good as income rises, demand decreases for it
Surplus quantity supplied is greater than quantity demanded
Shortage quantity supplied is less than quantity demanded
Changes in Equilibrium When supply and demand curves shift, the equilibrium price and quantity change.
price elasticity of demand a measure of how much the quantity demanded of a good responds to a change
in the price of that good
unit elastic a given change in price causes a proportional change in quantity demanded
Inelastic demand that doesn't change with change in price
Elastic demand that changes in response to price
perfectly elastic (horizontal line on graph) price doesn't change for how many units demanded
perfectly inelastic (vertical line on graph) quantity demanded doesn't change for whatever price it is
midpoint formula (x₁+x₂)/2, (y₁+y₂)/2
Determinants of Elasticity Substitutes, cost as percentage of income, and time to adjust to price changes all
influence price elasticity
Elasticity and Total Revenue price x quantity
as price change the effect of total revenue depend upon the elasticity
Elastic- as P increase TR deceases as P falls TR increases
Inelastic- P increases TR increases as P falls TR falls
Perfectly - P changes TR stays the same
total surplus consumer surplus + producer surplus
producer surplus the producers cost - the price of that good
CORRECT ANSWERS
Demand Consumer willingness and ability to buy products
Supply The quantity of something that producers have available for sale
quantity demanded the amount of a good that buyers are willing and able to purchase
, quantity supplied the amount of a good that sellers are willing and able to sell
change in demand/supply shift of the whole demand/supply curve
change in quantity demanded/supplied shift of point on the demand/supply curve
Determinants of Demand Taste, Income, Price related products, Number of customers
Determinants of Supply Resource Prices, Technological Advances, Taxes and Subsidies, Prices of Other
Goods, Price Expectations (the producer expects), Number of Sellers
normal good as income rises, demand increases for it
inferior good as income rises, demand decreases for it
Surplus quantity supplied is greater than quantity demanded
Shortage quantity supplied is less than quantity demanded
Changes in Equilibrium When supply and demand curves shift, the equilibrium price and quantity change.
price elasticity of demand a measure of how much the quantity demanded of a good responds to a change
in the price of that good
unit elastic a given change in price causes a proportional change in quantity demanded
Inelastic demand that doesn't change with change in price
Elastic demand that changes in response to price
perfectly elastic (horizontal line on graph) price doesn't change for how many units demanded
perfectly inelastic (vertical line on graph) quantity demanded doesn't change for whatever price it is
midpoint formula (x₁+x₂)/2, (y₁+y₂)/2
Determinants of Elasticity Substitutes, cost as percentage of income, and time to adjust to price changes all
influence price elasticity
Elasticity and Total Revenue price x quantity
as price change the effect of total revenue depend upon the elasticity
Elastic- as P increase TR deceases as P falls TR increases
Inelastic- P increases TR increases as P falls TR falls
Perfectly - P changes TR stays the same
total surplus consumer surplus + producer surplus
producer surplus the producers cost - the price of that good
