Lecture Notes for ECO 105.00 - Principles of Economics at Illinois State (ILSTU)

Notes Information

Material Type:Review Sheet
Class:ECO 105.00 - Principles of Economics
University:Illinois State University
  • Decrease in Demand
  • Increase in Supply
  • Equilibrium
  • Equilibrium Price
  • Increase in Demand
  • Individual Demand
  • Correct Answer
  • Change in Supply
  • Equilibrium Quantity
  • Resource Markets
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Sample Document Text

ECO 105: Principles of Economic Theory Chapter 3 Answer Key for Sample Multiple-Choice Questions 1. b) is the correct answer. Quantity supplied refers to a point on the supply curve and only tells how much output producers are willing to supply at a given price. 2. c) is the correct answer. Even if resources are allocated efficiently (that is, to their highest-valued uses) all wants cannot be satisfied. Human wants are unlimited. All an economic system can do is develop ways of ranking the competing alternative uses of the scarce resources, but it cannot completely eliminate the problem of scarcity. 3. b) is the correct answer. Market participants, acting in their self-interest, want to make the best trade possible. But they can do this only if they know the available trading opportunities, such as: who has goods for trade, what kinds of goods, what are their prices, etc. Obtaining such information is costly n it requires time and effort. Markets develop to reduce the time and effort required to ...

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