Study guide for exam 1
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This 6 page Study Guide was uploaded by megan Notetaker on Monday September 19, 2016. The Study Guide belongs to ECON 1030 at Ohio University taught by Tia McDonald in Fall 2016. Since its upload, it has received 38 views.
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Date Created: 09/19/16
Terms to know: - Scarcity - Opportunity cost - Comparative advantage - Marginal cost - Law of demand - Quantity demanded - Demand Schedule - Demand curve - Non-price determinants - Income - Population - Prices of related goods (components) - Complement - Substitute - Expectations about the future - Preferences - Law of supply - Quantity supplied - Diminishing Marginal productivity - Supply Schedule - Supply curve - Nonprice determinants of supply - Input prices - Number of sellers - Expectations about the future - Shortage - Surplus - Price ceiling - Price floor 1. Another word for equilibrium price is what? 2. What is the primary determinant of the quantity demanded of a good or service? 3. A characteristic of a demand for a good or service outside of its price is called what? 4. Give an example of a situation that would result in a shortage 5. What will result in increased scarcity as well as inefficiency? 6. When does a surplus occur? 7. When does a shortage occur? 8. List the three reasons marginal cost is upward sloping 9. Choosing to go to bed an hour early instead of choosing to stay up at study because it is more beneficial would be you engaging in what? 10. Price and quantity will be indeterminate when what two elements change? 11. Why do different countries specialize in different products? 12. What is the name for any item that is used to produce a good or service? 13. List the three reasons why demand curves are sloping downward 14. A tangible good that consumers, firms or governments wish to purchase is known as what? 15. If you normally purchase a Big Mac, but then decide to purchase a Whopper due to its price, you would be exercising what? 16. A place where buyers and sellers interact to trade goods, services and resources is known as what? 17. What will cause a supply curve to shift to the right? 18. What is the name for knowledge, inventions and innovations that can potentially increase resource productivity? 19. The overall or totally supply of a good or service is known as what? 20. List the four different types of resources 21. What is the law that states as the price of a good or service rises the quantity supplies will rise, all else held constant? 22. How are shortages and surpluses represented on the graph? 23. If you chose to play on your phone in class instead of paying attention, what would the opportunity cost be? 24. What is the formula for solving for marginal benefit? 25. What is the term used to describe the relationship between quantity demanded and price in table form? 26. If in the future a product’s price is expected to rise, what will happen to the demand immediately? 27. If you can produce a product at a lower price than another producer, you have what kind of benefit over them? 28. Define the difference between marginal cost and marginal benefit. 29. What can we assume will happen to the demand in products if the population suddenly increases? 30. What does the law of demand state? True/False 1. Spending more money on one thing and therefore less on another is an example of marginal cost 2. All natural resources used in production are classified as labor 3. The Production Possibilities Frontier is a graph that shows the possible combinations of two goods or services that can be produced with fixed resources 4. Optimal level of economic activity occurs when marginal benefit is greater than marginal cost 5. Complements are goods that are purchased together 6. Market demand is based on the overall preferences of everyone in the market 7. Tastes and preferences, the number of buyers and buyer expectations are all non price determinates of supply 8. More buyers will cause an increase in demand 9. An increase in supply is a shift to the left 10. A change in income can cause a shift in a supply curve 11. The price that balances demand and supply is known as the equilibrium price 12. A situation in which the quantity supplied is greater than the quantity demanded is called a surplus. 13. A change in supply is indicated by an increase in supply. 14. If tax is applied after a discount it will be a different price than if it was applied before. 15. People tend to respond in predictable ways. 16. If a new style of jeans came out, this would change the demand for the old jeans due to a shift in preferences. 17. As the price of an object decreases, its demand will decrease and its supply will increase. 18. Peanut butter and jelly are often bought together because they are complements. 19. An individual’s change in income can change the quantity supplied. 20. Using a celebrity to endorse a product is a great way to increase demand. ANSWERS: 1. Market- clearing price 2. The price 3. Nonprice determinant 4. Ex: sunscreen is sold out in the month of July 5. The market is in disequilibrium 6. When the quantity supplied is greater than the quantity demanded 7. When the quantity supplied is less than the quantity demanded 8. Resource scarcity, diminishing marginal productivity, increasing opportunity cost 9. Marginal benefit 10. Supply and Demand 11. Because of differences in opportunity cost 12. Resource 13. The income effect, the substitution effect, diminishing marginal unity 14. A good 15. The substitution effect 16. Market 17. The number of sellers will increase and/or producers expect lower voices in the future 18. Technology 19. Market Supply 20. Land, Capital, Labor, entrepreneurial ability 21. Law of supply 22. By the horizontal distance between the quantity demanded and the quantity supplied 23. The opportunity cost would be loosing the benefits of paying attention. 24. Marginal benefit = change in total benefit divided by change in quantity 25. Demand schedule 26. Demand will increase 27. A comparative advantage 28. Marginal cost= additional cost associated with 1 more unit of activity, marginal benefit= the additional benefit associated with 1 more unit of activity 29. Demand will increase 30. It states as the price of a good increases the quantity demanded decreases True/False 1. False, opportunity cost 2. False, land 3. True 4. False, it occurs when they’re equal 5. True 6. True 7. False, non price determinants of demand 8. True 9. False, shift to the right 10. False, demand 11. True 12. False 13. False, it can be an increase or decrease 14. False, it is the same 15. True 16. True 17. False, supply will decrease and demand will increase 18. True 19. False, Demand 20. True
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