ECON 213 TEST 1 QUESTIONS AND
VERIFIED ANSWERS
production possibilities frontier - ANSWER-model that illustrates the combination of outputs a company
can produce
consumer goods - ANSWER-satisfy our wants now
capital goods - ANSWER-help the production of goods in the future
law of demand - ANSWER-price rise demands falls
law of supply - ANSWER-supply is up, price is down
vise versa
ceteris paribus - ANSWER-change in one variable while keeping everything else constant "Latin meaning
other things equal"
inferior goods - ANSWER-purchased out of necessity rather than choice
normal goods - ANSWER-income rises, holds other things constant
shift of demand curve - ANSWER-Right ( increase)
left (decrease)
quantity demand - ANSWER-amount of goods a consumer is willing to purchase
market equilibrium - ANSWER-demand curve and supple curve intersect
shortage - ANSWER-occurs whenever the quantity supplied is less than the quantity demanded
surplus - ANSWER-occurs when the quantity supplied is greater that the quantity demanded
direct incentive - ANSWER-" cut my grass ill pay you $30"
indirect incentive - ANSWER-change something like gas prices in an indirect way
positive incentive - ANSWER-encourage through instances like reward
negative incentive - ANSWER-encourage action through fear
scarcity - ANSWER-limited supply of an asset
microeconomics - ANSWER-study of individual units that make up economy
macroeconomics - ANSWER-study of overall aspects and workings of economy
opportunity cost - ANSWER-highest valued alternatives that must be sacrificed to get something else
comparative advantage - ANSWER-
VERIFIED ANSWERS
production possibilities frontier - ANSWER-model that illustrates the combination of outputs a company
can produce
consumer goods - ANSWER-satisfy our wants now
capital goods - ANSWER-help the production of goods in the future
law of demand - ANSWER-price rise demands falls
law of supply - ANSWER-supply is up, price is down
vise versa
ceteris paribus - ANSWER-change in one variable while keeping everything else constant "Latin meaning
other things equal"
inferior goods - ANSWER-purchased out of necessity rather than choice
normal goods - ANSWER-income rises, holds other things constant
shift of demand curve - ANSWER-Right ( increase)
left (decrease)
quantity demand - ANSWER-amount of goods a consumer is willing to purchase
market equilibrium - ANSWER-demand curve and supple curve intersect
shortage - ANSWER-occurs whenever the quantity supplied is less than the quantity demanded
surplus - ANSWER-occurs when the quantity supplied is greater that the quantity demanded
direct incentive - ANSWER-" cut my grass ill pay you $30"
indirect incentive - ANSWER-change something like gas prices in an indirect way
positive incentive - ANSWER-encourage through instances like reward
negative incentive - ANSWER-encourage action through fear
scarcity - ANSWER-limited supply of an asset
microeconomics - ANSWER-study of individual units that make up economy
macroeconomics - ANSWER-study of overall aspects and workings of economy
opportunity cost - ANSWER-highest valued alternatives that must be sacrificed to get something else
comparative advantage - ANSWER-
