ECO 182 FINAL- DOWNS EXAM QUESTIONS AND
ANSWERS WITH COMPLETE SOLUTIONS VERIFIED
Normative Statement
Opinionated; Can not be proven
Positive Statements
Factual; Can be proven
Scarcity
Not enough of a given resource to satisfy an economy
Trade-Off
An exchange where two parties give up something beneficial for the opposing group
Model
Simplified representation of reality
Making Decisions at the Margin
Making a decision at the end to see which is beneficial
Perfectly Competitive Market
-Large number of producers and consumers
-All producers sell identical products
-Entering and exiting the market is FREE for consumers
Demand
While all other factors are held fixed, when the price of a good increases the quantity
demanded decreases
Supply
ANSWERS WITH COMPLETE SOLUTIONS VERIFIED
Normative Statement
Opinionated; Can not be proven
Positive Statements
Factual; Can be proven
Scarcity
Not enough of a given resource to satisfy an economy
Trade-Off
An exchange where two parties give up something beneficial for the opposing group
Model
Simplified representation of reality
Making Decisions at the Margin
Making a decision at the end to see which is beneficial
Perfectly Competitive Market
-Large number of producers and consumers
-All producers sell identical products
-Entering and exiting the market is FREE for consumers
Demand
While all other factors are held fixed, when the price of a good increases the quantity
demanded decreases
Supply
