ECON 201 Exam questions and
answers graded A+
Slope - ANS✅✅Constant at every point
Scarcity - ANS✅✅-Exists because people have unlimited wants
-Resources are not freely available
-Choices must be made
-Exists in all societies
What does "No such thing as a free lunch" mean? - ANS✅✅Resources used up in production of the
lunch were not available to satisfy other wants
Normative statement - ANS✅✅An opinion statement
Opportunity Cost - ANS✅✅The value of the best alternative not chosen
Comparative advantage - ANS✅✅-The ability of an individual to produce a good at a lower
opportunity cost than some other individual can.
-Specializing in the task for which you have the lowest opportunity cost
Law of increasing opportunity cost - ANS✅✅resources are not perfectly substitutable
What does a PPF show? - ANS✅✅Scarcity, opportunity cost, law of increasing cost, and efficiency
Law of demand - ANS✅✅Price and quantity demanded are inversely related
How is consumer demand different from consumer wants? - ANS✅✅Demand takes in account the
ability to pay
, Suppose there are only 2 goods, apples and oranges. What happens if the price of each good
increases by 15%? - ANS✅✅There is no substitution effect because relative prices have remained
constant
The income effect of a decrease in the price of legal services (a normal good) is an -
ANS✅✅increase in the quantity demanded of legal services
Which of the following statements about demand is true - ANS✅✅The demand curve for bacon
will not shift when the price of bacon changes
What will not shift the demand curve for movie tickets? - ANS✅✅A change in the price of movie
tickets
What is a normal good? - ANS✅✅a good for which a consumer will buy more of as their income
rises. Example= major league baseball tickets
Two goods are substitutable only if? - ANS✅✅an increase in the price of one leads to an increase
in the demand for the other
The basic reason that supply curves slope upward is that - ANS✅✅Production is characterized by
increasing costs
What would shift the supply curve for a good to the left? - ANS✅✅An increase in the cost of an
important resource used to make that good
What is a surplus? - ANS✅✅Current price of a good is greater than the equilibrium price
When there is a shortage.. - ANS✅✅The price of the good increases
When a price floor is set above the equilibrium price.. - ANS✅✅quantity supplied exceeds quantity
demanded at that set price
If all firms expect greater demand for their products or services, they will hire________ resources
(labor and capitol) and the economy will experience __________ - ANS✅✅More ; growth
answers graded A+
Slope - ANS✅✅Constant at every point
Scarcity - ANS✅✅-Exists because people have unlimited wants
-Resources are not freely available
-Choices must be made
-Exists in all societies
What does "No such thing as a free lunch" mean? - ANS✅✅Resources used up in production of the
lunch were not available to satisfy other wants
Normative statement - ANS✅✅An opinion statement
Opportunity Cost - ANS✅✅The value of the best alternative not chosen
Comparative advantage - ANS✅✅-The ability of an individual to produce a good at a lower
opportunity cost than some other individual can.
-Specializing in the task for which you have the lowest opportunity cost
Law of increasing opportunity cost - ANS✅✅resources are not perfectly substitutable
What does a PPF show? - ANS✅✅Scarcity, opportunity cost, law of increasing cost, and efficiency
Law of demand - ANS✅✅Price and quantity demanded are inversely related
How is consumer demand different from consumer wants? - ANS✅✅Demand takes in account the
ability to pay
, Suppose there are only 2 goods, apples and oranges. What happens if the price of each good
increases by 15%? - ANS✅✅There is no substitution effect because relative prices have remained
constant
The income effect of a decrease in the price of legal services (a normal good) is an -
ANS✅✅increase in the quantity demanded of legal services
Which of the following statements about demand is true - ANS✅✅The demand curve for bacon
will not shift when the price of bacon changes
What will not shift the demand curve for movie tickets? - ANS✅✅A change in the price of movie
tickets
What is a normal good? - ANS✅✅a good for which a consumer will buy more of as their income
rises. Example= major league baseball tickets
Two goods are substitutable only if? - ANS✅✅an increase in the price of one leads to an increase
in the demand for the other
The basic reason that supply curves slope upward is that - ANS✅✅Production is characterized by
increasing costs
What would shift the supply curve for a good to the left? - ANS✅✅An increase in the cost of an
important resource used to make that good
What is a surplus? - ANS✅✅Current price of a good is greater than the equilibrium price
When there is a shortage.. - ANS✅✅The price of the good increases
When a price floor is set above the equilibrium price.. - ANS✅✅quantity supplied exceeds quantity
demanded at that set price
If all firms expect greater demand for their products or services, they will hire________ resources
(labor and capitol) and the economy will experience __________ - ANS✅✅More ; growth
