Econ-202 Exam #1

Front 1

The summation of a person's assets:

Back 1

Wealth

Front 2

The study of how a society uses its scarce resources to supply the insatiable wants and needs of the society both now and in the future:

Back 2

Economics

Front 3

Any tangible item that meets the criteria of a want or need:

Back 3

Good

Front 4

Scarcity leads to ____.

Back 4

costs

Front 5

The items that go into producing the items that we want:

Back 5

Resources (i.e. factors of production)

Front 6

Any intangible but useful activity which meets the criteria of a want or need:

Back 6

Service

Front 7

What are scarce goods known as?

Back 7

Economic goods

Front 8

When the individual is making a decision:

Back 8

Private choice

Front 9

That which can be measured:

Back 9

Positive analysis (GOOD)

Front 10

The next best alternative foregone when making any decision:

Back 10

Opportunity cost

=explicit costs + implicit costs

Front 11

The coming together of buyers and sellers whose joint decisions determine the price:

Back 11

Market

Front 12

What are known as economic goods?

Back 12

Scarce goods

Front 13

The amount that will be purchased at a particular/specific price:

Back 13

Quantity demanded

Front 14

A good such that when incomes rise, demand for the good falls:

Back 14

Inferior good

Front 15

What are the 3 ways a society can make itself better off?

Back 15

1) saving
2) specialization of labor
3) trade

Front 16

When quantity demanded equals quantity supplied and there are no unintended shortages or surpluses:

Back 16

Equilibrium

Front 17

Cannot be measured; an opinion:

Back 17

Normative analysis (BAD)

Front 18

When the government is making a decision:

Back 18

Public choice

Front 19

States that as prices rise, quantity demanded falls, and as prices fall, quantity demanded rises:

Back 19

Law of Demand

Front 20

Goods you buy together:

Back 20

Complements (ex: peanut butter/jelly)

Front 21

A legal maximum which can be charged for a good or service:

Back 21

Price ceiling

Front 22

When quantity demanded is greater than quantity supplied at a specific price:

Back 22

Shortage

Front 23

What 5 things might change demand?

Back 23

Changes in:
1) tastes and preferences
2) expectations
3) laws
4) prices of other goods
5) income

Front 24

A good such that when incomes rise, demand for that good will also rise:

Back 24

Normal good

Front 25

The amount of a good or service that will be purchased at any given price:

Back 25

Demand

Front 26

A measure of consumer responsiveness:

Back 26

Elasticity

Front 27

All non-pecuniary costs (all costs not have to do w/$$):

Back 27

Implicit costs

Front 28

What is the ONLY thing that will change quantity demanded?

Back 28

A change in price

Front 29

When quantity supplied is greater than quantity demanded at a particular price:

Back 29

Surplus

Front 30

What age group is relatively responsive to a change in price?

Back 30

Senior citizens

Front 31

A similar good that you would buy instead of another good:

Back 31

Substitute (ex: buying Panasonic instead of Sony)

Front 32

States that as price rises, quantity supplied rises:

Back 32

Law of Supply

Front 33

The amount that people were willing to pay for a good or service, but did not have to:

Back 33

Consumer surplus

Front 34

List 2 facts about an effective price ceiling.

Back 34

An effective price ceiling will always:

1) Lie below equilibrium
2) Cause a shortage

Front 35

Accounting costs:

Back 35

Explicit costs

Front 36

What age group is relatively unresponsive to a change in price?

Back 36

Middle age

Front 37

Economic profit:

Back 37

Producer's surplus

Front 38

A legal minimum which can be charged for a good or service:

Back 38

Price floor

Front 39

If the price of one complement goes up, what will happen to the other complement?

Back 39

Demand for the other will fall.

Front 40

What is the price elasticity of demand equal to?

Back 40

= (% change in quantity demanded)/(% change in price)

= Q2-Q1/Q1

Front 41

What type of laws ALWAYS HURT the community?

Back 41

Anti-price governing laws

Front 42

If the price of one substitute goes up, what will happen to the other substitute?

Back 42

Demand for the other substitute will also rise.

Front 43

If a good is a necessity, demand for the good is:

Back 43

Inelastic

Front 44

If an increase in consumer incomes leads to a decrease in the demand for camping equipment, then camping equipment is:

Back 44

An inferior good

Front 45

The ability to produce a good at a lower opportunity cost than another producer:

Back 45

Comparative advantage

Front 46

A flatter demand curve is more likely to be:

Back 46

Price elastic

Front 47

For ____ goods, income elasticity is positive.

Back 47

Normal goods

Front 48

If price elasticity of demand is less than 1, demand is ____.

Back 48

Inelastic

Front 49

If price elasticity of demand is equal to 1, demand is ____.

Back 49

Unitary (has unit elasticity)

Front 50

If an increase in the price of blue jeans leads to an increase in the demand for tennis shoes, then blue jeans and tennis shoes are:

Back 50

Substitutes

Front 51

If price elasticity of demand is greater than 1, demand is ____.

Back 51

Elastic

Front 52

The flatter the demand curve, the more ____.

Back 52

Elastic

Front 53

A measure of how much the quantity demanded of a good responds to a change in consumers’ income:

Back 53

Income elasticity of demand

Front 54

For ____ goods, income elasticity is negative.

Back 54

Inferior goods

Front 55

The steeper the demand curve, the more ____.

Back 55

Inelastic

Front 56

A measure of how much the quantity demanded of a good responds to a change in the price of that good:

Back 56

Price elasticity of demand

Front 57

The price elasticity of demand is positive for ____.

Back 57

Substitutes

Front 58

A measure of the relative happiness or gratification gained by consuming different bundles of goods and services:

Back 58

Utility

Front 59

A good characterized by a positive income elasticity:

Back 59

Normal good

Front 60

The ____ the demand curve, the more elastic.

Back 60

Flatter

Front 61

The price elasticity of demand is negative for ____.

Back 61

Complements

Front 62

An effective price floor always creates...

Back 62

A surplus

Front 63

Why do senior citizens receive discounts?

Back 63

They have different time costs

Front 64

The measure of responsiveness of an economic agent to a change in variable:

Back 64

Elasticity

Front 65

You work an Income Elasticity of Demand problem and you answer is (-1.39). Therefore you know that the product is:

Back 65

Elastic and inferior

Front 66

The law of demand states that price and quantity demanded are:

Back 66

Inversely related

Front 67

An effective price floor always lies:

Back 67

Above the equilibrium

Front 68

You work a Cross-Price Elasticity of Demand problem and your answer is (-0.57). Therefore you know that the product is:

Back 68

Inelastic and a complement

Front 69

Rent controls are also known as:

Back 69

Price ceilings

Front 70

An effective price ceiling always lies...

Back 70

Below the equilibrium

Front 71

In a competitive market for DVD players, an increase in income will cause:

Back 71

DVD players = normal good

An increase in price

Front 72

An effective price celing always creates...

Back 72

A shortage

Front 73

In a competitive marks for chips, a decrease in the price of Lays Potato Chips will cause what w/ Golden Flake Potato Chips?

Back 73

Lays Chips/Golden Flake Chips = substitutes

A decrease in price

Front 74

In a competitive market for tennis rackets, a fall in the price of tennis balls will cause:

Back 74

Tennis racket/tennis balls = complements

An increase in price
An increase in demand
An increase in qty. supplied