Eco 2305 - Study guides, Class notes & Summaries

Economics is best defined as the study of: how people make choices in the face of scarcity and the implications of those choices for society as a whole. Economics is the study of: choice in the face of limited resources. Economists recognize that because people have limited resources: they have to make trade-offs. An implication of scarcity is that: people must make trade-offs. Chris has a one-hour break between classes every Wednesday. Chris can either stay at the library and study or...

"other things equal, when the price of a good rises, the quantity demanded of the good falls, and when the price falls, the quantity demanded rises" - this relationship between price and quantity demanded is referred to as - Answer-the law of demand a basic principle of economics is that a country's standard of living depends on its - Answer-ability to produce goods and services a bond that never matures is known as a - Answer-perpetuity a circular flow diagram is a model that - Answer-...

Economists recognize that because people have limited resources: - Answer-They have to make trade-offs If all the world's resources were to magically increase one hundredfold, then: - Answer-People would still have to make trade-offs Chris has a one-hour break between classes every Wednesday. Chris can either stay at the library and study or go to the gym and work out. The decision Chris must make is: - Answer-An economic problem because Chris has only one hour, and engaging in one activi...

scarcityA situation in which unlimited wants exceed the limited resources available to fulfill those wants Economicsthe study of the choices people make to attain their goals, given their scarce resources economic modela simplified version of reality used to analyze real-world economic situations marketa group of buyers and sellers of a good or service and the institution or arrangement by which they come together to trade Three Key Economic Ideas1. People are rational 2. People res...

GDP does not directly include intermediate goods because - Answer-that would count the intermediate goods twice. Let C represent consumption expenditure, S saving, I gross private domestic investment, G government expenditure on goods and services, and X - M net exports of goods and services. Then GDP equals - Answer-C + I + G + X - M. Two methods of measuring GDP are - Answer-the income approach and the expenditure approach Nominal GDP is the value of final goods and services - Answer-at ...

Scarcity - Answer-Resources are limited (unlimited human needs, but limited resources) The Study of Economics - Answer-How to manage limited resource to maximize the outcome/output Goods - Answer-Tangible Items (clothes, food, etc) Services - Answer-Intangible Items (education, health care) 3 Economic Questions - Answer-What to produce? How to produce? For whom to produce Command/Socialism System - Answer-Centralized decisions about production (ex: soviet union/china) Capitalized/ Fr...

Marla will make $10 by tutoring for an additional hour, but she will lose an hour of studying for her own economics test. Marla decides to study rather than tutor. Marla's choice indicates that she: values an additional hour of studying more than the $10 she would earn tutoring One of the uses of marginal analysis is that it: refers to decisions about whether to do a bit more or a bit less of an activity Specialization and trade usually lead to: the exchange of more goods and services...