Review final for economics 201
Please refer to the attachment.
<br>1. D. the definition of scarcity.
<br>2. B. This shows the market economy of most societies.
<br>3. C. opportunity cost = the benefit that you have to sacrifice for recreation.
<br>4. A. we only care about the marginal values in economics.
<br>5. C. Externality! The cost is borne by others. The factory will make extra profit.
<br>6. A. Government intervenes are always making matters worse. Higher cost for sawmill results in higher price and less relative income.
<br>7. B. Factors flow into firm for production.
<br>8. B. Just the definition of PPF.
<br>9. B. This is the economically correct statement
<br>10. B. "mono-" means one!
<br>11. A. Price of substitute increases, demand for the substitute decreases. People tend to buy more good X, so the demand for x increases
<br>12. D. Just the definition of inferior good, e.g. cheap patatoes.
<br>13. A. demand curve is always downward sloping
<br>14. C. this will not affect the consumer's choice.
<br>15. A. the higher price, the greater profit, the more quantity the producer is willing to supply
<br>16. D. both demand and supply curve will shift to right, and result in D situation.
<br>17. B. Elasticity = (dQ/dP)*P/Q
<br>18. A. the more substitutes, the higher elasticity.
<br>19. A. The percentage decrease in quantity demanded is higher than percentage increase ...