CP Economics Semester Exam Review

Latin word that means "all else equal, or all other things held constant"

• Ceterius Paribus

• mutatis mutandis

• De jure

• Certiorari

What does demand mean?

• The ability to pay for a good

• When a person wants a good

• The desire to own something and the ability to pay for it

As the price increases, quantity demanded decreases. As price decreases, quantity demanded increases.

• Demand

• Law of Demand

• Elasticity of Demand

• Shift in Demand

What causes the PPF curve to shift to the right?

• Unattainable points

• Economic efficiency

• increase in resources - economic growth

• Decrease in resources-economic contraction

Answer explanation

The production possibilities curve shows the combination of goods a society can produce efficiently. To produce more, the society has to experience growth.

Efficiency...

• is making the country better off without making someone worse off.

• wastes resources to produce goods

• occurs when the economy is experiencing unemployment

• can be shown by a point inside of the PPF curve

When the government provides money to certain industries to help keep them profitable.

• embargo

• standard

• need

• subsidy

Which of the following gives examples of land?

• assembly line, factories, gasoline, and workers

• farmland, fertilizer, and tractors

• natural gas, iron ore, coal

• buildings, factories, and dams

If Pizza Hut and Dominos and substitutes and the price of Pizza Hut increases, what happens to the demand for Dominos?

• Increases

• Decreases

• Stays the same

• Unknown

Answer explanation

Since they are considered substitutes, people will stop buying Pizza Hut and will change their demand to Dominos.

GDP that is used to measure standard of living.

• Nominal GDP

• Real GDP

• GDP per Capita

• GDP

Answer explanation

GDP per capita measure how much gross domestic product is in an economy PER PERSON. This is how we measure standard of living.

This type of good has an increase in demand when income decreases or has a decrease in demand when income rises.

• Substitutes

• Complements

• Inferior Goods

• Normal Goods

Answer explanation

When income rises, you can afford goods of better quality. So your demand for goods of less quality will decrease. Instead of buying canned vegetables, you can now afford to purchase fresh produce.