MODULE 1

Question 1

are goods and services purchased by households for their own consumption.
These are the items and services that people purchase to meet their daily needs, such as
food, clothing, and shelter.

Answer 1

Necessities

Question 2

are goods and services that are used to produce other goods
and services.

Answer 2

producer goods

Question 3

This refers to the value that a product or service provides to
the end user or consumer.

Answer 3

Consumer perspective:

Question 4

This refers to the cost of producing a product or service,
including all the resources and inputs required to bring it to market.

Answer 4

Producer perspective:

Question 5

is the analysis and evaluation of the factors that will affect the
economic success of engineering projects to the end that a recommendation can be made
which will insure the best use of capital.

Answer 5

Engineering economy

Question 6

on the other hand, are goods and services that are considered non-essential or
non-critical to survival.

Answer 6

Luxuries,

Question 7

is the quantity of a certain commodity that is bought at a certain price at a given
place and time.

Answer 7

Demand

Question 8

Changes in price motivate consumers to buy relatively
cheaper substitutes goods.

Answer 8

Substitution Effect –

Question 9

Changes in price affect the purchasing power of consumer’s
income.

Answer 9

Income Effect –

Question 10

as you continue to consume a
given product, you will eventually get less addition utility (satisfaction) from each
unit you consume

Answer 10

The Law of Diminishing Marginal Utility –

Question 11

If consumers develop a preference for a different
type of good or service, the demand for the original good or service will decrease
and the demand curve will shift to the left.

Answer 11

A change in consumer preferences:

Question 12

f consumer incomes increase, the demand for normal
goods will increase, and the demand curve will shift to the right. Conversely,

Answer 12

A change in consumer income: I

Question 13

If the price of a substitute good or service
decreases, the demand for the original good or service will decrease, and the demand
curve will shift to the left.

Answer 13

change in the price of related goods:

Question 14

is an equation that describes the relationship between the price
of a good or service and the quantity of it that consumers are willing and able to
purchase at that price.

Answer 14

demand function

Question 15

demand function

Answer 15

Qd = a - bP

Question 16

is a
measure of how responsive demand is to price changes for a product or service.

Answer 16

Elasticity of demand coefficient (also known as price elasticity of demand)

Question 17

equation of EDC

Answer 17

(q2-qi/q1)/ (p2-p1/p1
)

Question 18

occurs when a decrease in selling
price result in a greater than proportionate increase in
sales.

Answer 18

Elastic demand

Question 19

Elastic demand

Answer 19

EDC > 1

Question 20

occurs when a decrease in
the selling price produces a less than proportionate
increase in sells.

Answer 20

1.3.2 Inelastic demand

Question 21

1.3.2 Inelastic demand

Answer 21

EDC < 1

Question 22

occurs when
the mathematical product of volume and price is
constant.

Answer 22

Unitary elasticity of demand

Question 23

Unitary elasticity of demand

Answer 23

EDC = 1

Question 24

occurs when an increase in price has no effect to the
quantity.

Answer 24

1.3.4 Perfectly inelastic

Question 25

Perfectly inelastic

Answer 25

EDC = 0

Question 26

occurs when the demand increases but the price remains
unchanged.

Answer 26

Perfectly Elastic

Question 27

Perfectly Elastic

Answer 27

EDC = ∞

Question 28

occurs in a situation where a commodity or service
is supplied by a number of vendors and there is nothing to prevent additional
vendors entertaining the market.

Answer 28

Perfect competition

Question 29

exists
when a unique product or service is available from a single vendor and that vendor
can prevent the entry of all others into the market.

Answer 29

monopoly

Question 30

exists when there are so few suppliers of a product or service that
action by one will almost inevitably result in similar action of others.

Answer 30

Oligopoly

Question 31

exists when many companies offer competing
products or services that are similar, but not perfect, substitutes.

Answer 31

Monopolistic Competition

Question 32

is a basic economic principle that explains how prices
and quantities of goods and services are determined in a market economy.

Answer 32

The law of supply and demand

Question 33

is a table or graph that shows the relationship between the
price of a good or service and the quantity of it that a producer is willing and
able to supply at that price, holding all other factors constant.

Answer 33

A supply schedule

Question 34

is a graphical representation of the relationship between the
price of a good or service and the quantity of it that a producer is willing and
able to supply at that price, holding all other factors constant.

Answer 34

supply curve

Question 35

is a mathematical equation that represents the relationship
between the price of a good or service and the quantity of it that a producer is
willing and able to supply at that price, holding all other factors constant.

Answer 35

supply function

Question 36

supply function

Answer 36

supply = a+b(price)

Question 37

is an economic principle that states that as more and
more of a variable input (such as labor or capital) is added to a fixed input (such as land
or a factory), the marginal product of the variable input will eventually decline.

Answer 37

The law of diminishing returns

Question 38

is an economic principle that states that as more and
more of a variable input (such as labor or capital) is added to a fixed input (such as land
or a factory), the marginal product of the variable input will eventually decline.

Answer 38

The law of diminishing returns