Econ 201 Exam questions with
answers defined 100%
Absolute advantage - ANS✅✅The ability to produce a good using fewer inputs than another
producer
Opportunity cost - ANS✅✅whatever must be given up to obtain some item
Comparative advantage - ANS✅✅The ability to produce a good at a lower opportunity cost than
another producer
Competitive market - ANS✅✅A market in which there are many buyers and many sellers so that
each has a negligible impact on the market price
Quantity demanded - ANS✅✅the amount of a good that buyers are willing and able to purchase
Law of demand - ANS✅✅the claim that, other things equal, the quantity demanded of a good falls
when the price of the good rises
demand schedule - ANS✅✅a table that shows the relationship between the price of a good and
the quantity demanded
demand curve - ANS✅✅a graph of the relationship between the price of a good and the quantity
demanded
normal good - ANS✅✅a good for which, other things equal, an increase in income leads to an
increase in demand
inferior good - ANS✅✅a good for which, other things equal, an increase in income leads to a
decrease in demand
substitutes - ANS✅✅Two goods for which an increase in the price of one leads to an increase in
the demand for the other
, complements - ANS✅✅Two goods for which an increase in the price of one leads to a decrease in
the demand for the other
demand curve shifters - ANS✅✅income, prices of related goods, tastes, expectations, number of
buyers, price
quantity supplied - ANS✅✅the amount of a good that sellers are willing and able to sell
law of supply - ANS✅✅the claim that, other things equal, the quantity supplied of a good rises
when the price of the good rises
supply schedule - ANS✅✅a table that shows the relationship between the price of a good and the
quantity supplied
supply curve - ANS✅✅A graph of the relationship between the price of a good and the quantity
supplied
supply curve shifters - ANS✅✅price, input prices, technology, expectations, number of sellers
equilibrium - ANS✅✅A situation in which the market price has reached the level at which quantity
supplied equals quantity demanded
equilibrium price - ANS✅✅The price that balances quantity supplied and quantity demanded
equilibrium quantity - ANS✅✅The quantity supplied and the quantity demanded at the
equilibrium price
surplus - ANS✅✅a situation in which quantity supplied is greater than quantity demanded
shortage - ANS✅✅a situation in which quantity demanded is greater than quantity supplied
law of supply and demand - ANS✅✅The claim that the price of any good adjusts to bring the
quantity supplied and the quantity demanded for that good into balance
answers defined 100%
Absolute advantage - ANS✅✅The ability to produce a good using fewer inputs than another
producer
Opportunity cost - ANS✅✅whatever must be given up to obtain some item
Comparative advantage - ANS✅✅The ability to produce a good at a lower opportunity cost than
another producer
Competitive market - ANS✅✅A market in which there are many buyers and many sellers so that
each has a negligible impact on the market price
Quantity demanded - ANS✅✅the amount of a good that buyers are willing and able to purchase
Law of demand - ANS✅✅the claim that, other things equal, the quantity demanded of a good falls
when the price of the good rises
demand schedule - ANS✅✅a table that shows the relationship between the price of a good and
the quantity demanded
demand curve - ANS✅✅a graph of the relationship between the price of a good and the quantity
demanded
normal good - ANS✅✅a good for which, other things equal, an increase in income leads to an
increase in demand
inferior good - ANS✅✅a good for which, other things equal, an increase in income leads to a
decrease in demand
substitutes - ANS✅✅Two goods for which an increase in the price of one leads to an increase in
the demand for the other
, complements - ANS✅✅Two goods for which an increase in the price of one leads to a decrease in
the demand for the other
demand curve shifters - ANS✅✅income, prices of related goods, tastes, expectations, number of
buyers, price
quantity supplied - ANS✅✅the amount of a good that sellers are willing and able to sell
law of supply - ANS✅✅the claim that, other things equal, the quantity supplied of a good rises
when the price of the good rises
supply schedule - ANS✅✅a table that shows the relationship between the price of a good and the
quantity supplied
supply curve - ANS✅✅A graph of the relationship between the price of a good and the quantity
supplied
supply curve shifters - ANS✅✅price, input prices, technology, expectations, number of sellers
equilibrium - ANS✅✅A situation in which the market price has reached the level at which quantity
supplied equals quantity demanded
equilibrium price - ANS✅✅The price that balances quantity supplied and quantity demanded
equilibrium quantity - ANS✅✅The quantity supplied and the quantity demanded at the
equilibrium price
surplus - ANS✅✅a situation in which quantity supplied is greater than quantity demanded
shortage - ANS✅✅a situation in which quantity demanded is greater than quantity supplied
law of supply and demand - ANS✅✅The claim that the price of any good adjusts to bring the
quantity supplied and the quantity demanded for that good into balance
