Econ 203 exam - Study guides, Class notes & Summaries

ECON 203 EXAM 1 TAMU With 100% Correct Answers 2024/2025 What are 3 gains from society when countries decide to specialize? - answer-specialization and trade -more resources -Improvements in technology/productivity True or False: Every country have comparative advantage in something. - answerTrue What are 2 gains when two countries engage in specialization and trade? - answer-total production increases -new points reached on the PPF that were originally unattainable What are the 4 char...

Elastic Demand correct answers Change in price (%) causes a relatively large change in the quantity demanded (%) Quantity changes faster than price Total revenue increases when price decreases, consumers are more responsive to change >1.0 is elastic Inelastic Demand correct answers Change in price (%) causes a relatively small change in the quantity demanded (%) aka QD is not very sensitive to a change in price Also occurs if the percentage change in QD is less than the percent...

Econ 203 Exam 1 Detailed Questions And Expert Answers 2024

What are 3 gains from society when countries decide to specialize? correct answers -specialization and trade -more resources -Improvements in technology/productivity True or False: Every country have comparative advantage in something. correct answers True What are 2 gains when two countries engage in specialization and trade? correct answers -total production increases -new points reached on the PPF that were originally unattainable What are the 4 characteristics of competitive mark...

The Federal Reserve CORRECT ANSWER in charge of monetary policy in U.S., adjusts the money supply to help achieve its monetary policy goals Monetary CORRECT ANSWER increasing and decreasing amount of money in the economy Monetary Policy Goals CORRECT ANSWER e prices (low inflation) and maximum employment 2. stable economic growth 3. stable financial system The Fed's Monetary Policy Tools CORRECT ANSWER open market operations, interest rates on reserves, required reserve ratio, discou...

Production Possibility CORRECT ANSWER a countries production capabilities modeled by the PPF PPF (Production Possibilities Frontier) CORRECT ANSWER -Line or curve that shows all possible combos of 2 outputs Points on PPF CORRECT ANSWER -points outside line are unattainable -points within are attainable but inefficient -points on line are attainable and efficient Opportunity Cost CORRECT ANSWER tradeoff between producing more of a good, or less of a good Opportunity Cost Formula COR...

Principles of Economics: People face trade-offs CORRECT ANSWER Have to make choices because of scarcity Scarcity CORRECT ANSWER A situation in which unlimited wants exceed the limited resources available to fulfill those wants Principles of Economics: The cost of something is what you give up to get it. CORRECT ANSWER Opportunity Costs Principles of Economics: Rational people think at the margin CORRECT ANSWER Weighs marginal costs and marginal benefits. (See Transactional Utility) T...

10 principles of economics consist of correct answers 1. people face tradeoffs 2. the cost of something is what you give up to get it 3. rational people think at the margin 4. people respond to incentives 5. trade makes everyone better off 6. markets are usually a good way to organize economic activity 7. governments can sometimes improve market outcomes 8. a country standard of living depends on its ability to produce goods and services 9. prices rise when government pri...

Real GDP Growth Rate CORRECT ANSWER [real GDP per capita(cy)-Real GDP per capita(py)]/ (Real GDP per capita (py)) x 100% OR Nominal GDP Growth Rate- Inflation Rate- Population Rate Compounding Formula CORRECT ANSWER GDP(yearA)=GDP(YearB)x(1+Growth rate)^(A-B) Rule of 70 CORRECT ANSWER Years until income doubles= 70/ Real GDP Growth Rate Components of Productivity CORRECT ANSWER Physical capital, human capital, tech improvements, and natural resources Convergence Theory CORRECT ANSW...

The Federal Reserve correct answers in charge of monetary policy in U.S., adjusts the money supply to help achieve its monetary policy goals Monetary correct answers increasing and decreasing amount of money in the economy Monetary Policy Goals correct answers e prices (low inflation) and maximum employment 2. stable economic growth 3. stable financial system The Fed's Monetary Policy Tools correct answers open market operations, interest rates on reserves, required reserve ratio, d...