Economics 201 Final Exam questions with answers
Definition of Economics -Correct Answer-A social science concerned chiefly with description and analysis of the production and consumption of goods and services
Definition of Scarcity -Correct Answer-Not abundant or plentiful
4 types of economi...
Economics 201 Final Exam questions
with answers
Definition of Economics -Correct Answer-A social science concerned chiefly with description and analysis
of the production and consumption of goods and services
Definition of Scarcity -Correct Answer-Not abundant or plentiful
4 types of economic resources -Correct Answer-Land, Labor, Capital, Entrepreneurship
Definition of Opportunity Cost -Correct Answer-The value of what is sacrificed to get something else
Explicit cost -Correct Answer-a direct payment made to others in the course of running a business, such
as wage, rent and materials
Implicit Cost -Correct Answer-the opportunity cost that a business takes to run the business
Specialization -Correct Answer-When a business or person does one thing really well
exchange -Correct Answer-the trading of goods or services between two parties
Comparative advantage -Correct Answer-When a company produces a good in a better way than when
compared to other goods
Absolute advantage -Correct Answer-When a business produces a good at the lowest cost
What questions does an economy answer -Correct Answer-What to produce
How much to produce
for whom to produce
how will it deal with change
, how will progress be promoted
Traditional economy -Correct Answer-an economy based off culture or tradition
Market economy -Correct Answer-An economic system based on private property rights and self interest
in which individuals decide how,for whom and what to produce
Command economy -Correct Answer-an economic system based on individuals goodwill towards others
and in which society decides how, for whom, and what to produce
definition of a market -Correct Answer-A regular gathering of people for the purchase and sale of
provisions, livestock, and other commodities.
Law of Demand -Correct Answer-As Price goes up, Demand goes down
law of supply -Correct Answer-price and quantity behave in the same way (as p goes up, Qd goes up)
inferior good -Correct Answer-as your income goes up, you buy less of the good.
substitute -Correct Answer-a good that can be easily replaced by another (pens and pencils)
complement -Correct Answer-a good that goes together with another (peanut butter and jelly)
excise tax -Correct Answer-a tax placed on a specific good
definition of elasticity -Correct Answer-refers the degree to which individuals (consumers/producers)
change their demand/amount supplied in response to price or income changes.
elasticity = change in quantity / change in price
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