Frequently Asked Questions

1. What are the trade offs involved in economic choices? What relationship do they have with opportunity costs?
2. In what ways does the Production Possibilities Frontier (PPF) illustrate the following economic concepts: scarcity, resources and their employment and management, and trade offs that require choices?
3. Can you explain how opportunity costs can be expressed as a ratio?
4. What is the difference between accounting and economic cost?
5. What is marginal analysis? How does it relate to the Law of Diminishing Returns for a company?
6. What is meant by demand? Can you provide examples of a schedule and a demand curve?
7. Can you explain what economists mean by the Law of Demand?
8. Can you explain the difference between a change in quantity demanded, and a change in demand?
9. What are the five factors that cause an increase or a decrease in demand? Can you give examples of each?
10. Can you explain what economists mean by supply?
11. How is supply illustrated? What do economists mean by the Law of Supply?
12. What are the influences on the provision of a good or service that create an increase in supply?
13. What are the influences on the provision of a good or service that create a decrease in supply?
14. What is meant by an equilibrium price, and quantity?
15. What do economists mean by excess demand?
16. What do economists mean by excess supply?
17. What do economists mean by a price floor?
18. What do economists mean by a price ceiling?
19. How is price elasticity of demand defined and calculated?
20. What is meant by elastic, inelastic, and unit elastic demand?
21. What is the total revenue test? How does it work in terms of a calculation?
22. What are the influences that make a good, price elastic?
23. What are the influences that make a good, price inelastic?
24. When is supply considered price elastic, or price inelastic?
25. What are the influences on the elasticity of supply?