ECON 160 - MIDTERM EXAM 1 QUESTIONS &
ANSWERS 100% CORRECT (FULLY SOLVED)
- a measure of the responsiveness of quantity demanded to a
change in price
- is actually determined by looking at the percentage change in
quantity demanded for a 1% change in price
- it's always a negative # - correct answer- price elasticity
of demand
- concept under which economists examine a change in one
variable while holding everything else constant
- Latin meaning "other things being equal" - correct answer-
ceteris paribus
- model that illustrates the combinations of outputs that a
society can produce if all of its resources are being used
efficiently
- illustrates trade-offs and explains opportunity costs and the
role of additional resources and technology in creating economic
growth - correct answer- Production Possibilities Frontier
(PPF)
,- responsiveness of buyers and sellers to changes in price or
income
- a useful concept because it allows us to measure how much
consumers and producers change their behavior when princes
or income changes - correct answer- elasticity
-systematically evaluating a course of action
- requires a purposeful evaluation of the available opportunities
to make the best decision possible - correct answer-
economic thinking
* consists of a group of buyers and sellers for a particular
product or service
* when competition is present, markets produce low prices -
correct answer- fundamentals of markets
1. researchers observe a phenomenon that interests them
2. develop a hypothesis
3. construct a model to test the hypothesis
4. design experiments to test how well the model works -
correct answer- scientific method steps (1-4):
, 1. substitutes
2. share of the budget spent on the good
3. necessities versus luxury good
4. time - correct answer- 4 determinants of elasticity p.
113
1. what we include in the model
2. assumptions made when choosing what to include in the
model
3. outside conditions that can affect our models performance -
correct answer- building an economic model
2 goods that are used in place of each other. when the price of a
substitute good rises, the quantity demanded falls and the
demand for the related good goes up - correct answer-
substitues
2 goods that are used together. when the price of a
complementary good rises, the demand for the related good
goes down - correct answer- complements
5 foundations of economics - correct answer- 1.
incentives
ANSWERS 100% CORRECT (FULLY SOLVED)
- a measure of the responsiveness of quantity demanded to a
change in price
- is actually determined by looking at the percentage change in
quantity demanded for a 1% change in price
- it's always a negative # - correct answer- price elasticity
of demand
- concept under which economists examine a change in one
variable while holding everything else constant
- Latin meaning "other things being equal" - correct answer-
ceteris paribus
- model that illustrates the combinations of outputs that a
society can produce if all of its resources are being used
efficiently
- illustrates trade-offs and explains opportunity costs and the
role of additional resources and technology in creating economic
growth - correct answer- Production Possibilities Frontier
(PPF)
,- responsiveness of buyers and sellers to changes in price or
income
- a useful concept because it allows us to measure how much
consumers and producers change their behavior when princes
or income changes - correct answer- elasticity
-systematically evaluating a course of action
- requires a purposeful evaluation of the available opportunities
to make the best decision possible - correct answer-
economic thinking
* consists of a group of buyers and sellers for a particular
product or service
* when competition is present, markets produce low prices -
correct answer- fundamentals of markets
1. researchers observe a phenomenon that interests them
2. develop a hypothesis
3. construct a model to test the hypothesis
4. design experiments to test how well the model works -
correct answer- scientific method steps (1-4):
, 1. substitutes
2. share of the budget spent on the good
3. necessities versus luxury good
4. time - correct answer- 4 determinants of elasticity p.
113
1. what we include in the model
2. assumptions made when choosing what to include in the
model
3. outside conditions that can affect our models performance -
correct answer- building an economic model
2 goods that are used in place of each other. when the price of a
substitute good rises, the quantity demanded falls and the
demand for the related good goes up - correct answer-
substitues
2 goods that are used together. when the price of a
complementary good rises, the demand for the related good
goes down - correct answer- complements
5 foundations of economics - correct answer- 1.
incentives
