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Economics 101 Exam 1 - SDSU Cullivan Questions and Answers 100% Solved

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Macroeconomics 101

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Macroeconomics 101

Economics 101 Exam 1 - SDSU Cullivan Questions and Answers 100% Solved Microeconomics - the study of the economy at the small-scale level, examining individuals and specifics markets -deals with individual households and markets (gasoline market) -how market prices are determined and how they ...

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Economics 101 Exam 1 - SDSU Cullivan

Questions and Answers 100% Solved

Microeconomics - ✔✔the study of the economy at the small-scale level,

examining individuals and specifics markets

-deals with individual households and markets (gasoline market)

-how market prices are determined and how they will adjust to a variety of

different events (weather and government regulation)

Macroeconomics - ✔✔The study of the economy at the large-scale level,

examining total output, the price level, and other aggregate measures of

the economy

-examines entire economy of a state, a country, or the world

-deals with large-scale issues of an economy like total output, average

price levels (and inflation) and unemployment

-the whole economy can be affected by important national and global

events (wars, natural disasters, and technological innovation, decisions

made by government policy makers)

Aggregate - ✔✔Means "total"

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,-Used in macroeconomics (aggregation)

Aggregation - ✔✔In macroeconomics:

-Adds up output across all industries

-Adds up prices to arrive at one measure of how expensive goods and

services are this year compared to last year

-Adds up data about whos employed and who isn't so we know the state of

all labor markets and develop a measure of the unemployment rate

Economics - ✔✔The study of how individuals and societies allocate scarce

resources among many competing uses

Resource - ✔✔Any item, whether a gift of nature, the result of production,

or the result of human effort, that is used to produce goods and services

Land - ✔✔All natural resources used in production; sometimes referred to

as "gifts of nature"

Labor - ✔✔All physical and mental activity devoted to producing goods and

services

Capital - ✔✔The tools, machinery, infrastructure and knowledge used to

produce goods and services.

-Sometimes divided into "physical" and "human"

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, Physical capital - ✔✔refers to tangible items that are created to increase

productivity

Human capital - ✔✔refers to the knowledge and skills that people acquire

in order to increase productivity

Entrepreneurial ability - ✔✔The talent or ability to combine land, labor, and

capital to produce goods and services.

-Different from human capital and in that it primarily involves assuming risk

and organizing resources into a productive process

Scarcity - ✔✔A condition that results from the inability of limited resources

to satisfy unlimited wants

-reflects the fact that unlimited wants cannot be completely satisfied with

limited resources

Relative scarcity - ✔✔The comparison of the scarcity of one good, service

or resource to that of another

(relative scarcity of drinkable water as compared to water in general)

Allocation - ✔✔The process of assigning a good, service, or resource to

one use instead of another

(proposal that would change the allocation of public space for recreational

use by demolishing a skating park and building an arboretum)

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