PSU - ECON 102 FINAL EXAM REVIEW NEWEST ACTUAL EXAM WITH COMPLETE
QUESTIONS AND CORRECT VERIFIED ANSWERS (DETAILED ANSWERS)
ALREADY GRADED A+ 100%
Economics - <<ANSWER>>study of how people and societies use limited resources to
satisfy unlimited wants; the management of scarcity and choice
Resources - <<ANSWER>>1. Land: anything provided by nature
2. Labor: Mental and physical efforts of humans
3. Capitol: anything that is provided which in turn is used to produce other goods and
services
Specialization Effect - <<ANSWER>>As you add more workers to a fixed amount of
capitol, the workers can specialize in different tasks which makes the MPL increase
Congestion Effect - <<ANSWER>>as you add more and more workers to a fixed
capitol, each worker has an average of less and less capitol with which to work
Law of Diminishing Marginal Product - <<ANSWER>>- as more and more variable
resources (such as workers or materials) are added to a fixed amount of other
resources (such as buildings and equipment), the additional (marginal) amount
produced eventually decreases
Fixed Cost - <<ANSWER>>-a cost that does not change, no matter how much of a
good is produced
-in short run
Variable cost - <<ANSWER>>-costs that change as output changes
-in short run
Average Fixed/Variable cost - <<ANSWER>>FC/Q or VC/Q
Marginal Cost - <<ANSWER>>The change of total cost for producing one additional unit
of production.
Marginal vs Average - <<ANSWER>>Think of HW example: personal HW grade is
marginal, Class average of HW grade is Average
, Assumptions of Perfect Competition - <<ANSWER>>1. Many buyers and sellers
2. firms are price takers
3. identical products
4. easy exit and entry
5. complete information
6. no transaction costs
7. no government interference
What do firms do when MR>MC - <<ANSWER>>increase output to increase profit
What do firms do when MR<MC - <<ANSWER>>decrease output to increase profit
What happens when Market Price > Breakeven Price - <<ANSWER>>Firms are making
positive economic profit,
attracts entry from other firms,
decreases the Market Price
What happens when Market Price < Breakeven Price - <<ANSWER>>Firms make
negative economic profit,
firms will exit the industry,
decrease in market supply,
increase in market price
What happens when you raise the price of an inelastic good - <<ANSWER>>total
revenue will increase
What happens when you raise the price of an elastic good - <<ANSWER>>Total
revenue will decrease
Perfectly Inelastic - <<ANSWER>>|E|=0
Microeconomics - <<ANSWER>>The study of decision making undertaken by individual
economic agents (households, firms)
Macroeconomics - <<ANSWER>>The study of the economy as a whole
3 main economic questions - <<ANSWER>>What will we produce? how will we
produce? who gets it?
How to answer 3 basic economic questions - <<ANSWER>>1. Command Economy:
control authority ex. Queen
2. Market Economy: buyers and sellers come together
3. Mixed Economy: has elements of both 1 and 2
The benefits of buying summaries with Stuvia:
Guaranteed quality through customer reviews
Stuvia customers have reviewed more than 700,000 summaries. This how you know that you are buying the best documents.
Quick and easy check-out
You can quickly pay through credit card for the summaries. There is no membership needed.
Focus on what matters
Your fellow students write the study notes themselves, which is why the documents are always reliable and up-to-date. This ensures you quickly get to the core!
Frequently asked questions
What do I get when I buy this document?
You get a PDF, available immediately after your purchase. The purchased document is accessible anytime, anywhere and indefinitely through your profile.
Satisfaction guarantee: how does it work?
Our satisfaction guarantee ensures that you always find a study document that suits you well. You fill out a form, and our customer service team takes care of the rest.
Who am I buying these notes from?
Stuvia is a marketplace, so you are not buying this document from us, but from seller DRWAILS. Stuvia facilitates payment to the seller.
Will I be stuck with a subscription?
No, you only buy these notes for £14.67. You're not tied to anything after your purchase.
