ECO 201 FINAL EXAM 2025/2026
QUESTIONS AND ANSWERS 100% PASS.
What is economics? - ANS The social science that studies production, distribution, and
consumption of goods and serves // the study of the allocation of limited resources across
unlimited wants
What does an economist examine? - ANS who gets what, how, why, and when
Land - ANS Inputs that exist in the world around us, sometimes called natural resources
ex. water, air, plants, dirt
Labor - ANS Human input, sometimes called human capital.
ex. blue collar workers, white collar workers
Capital - ANS Human-made inputs, stuff that makes stuff.
ex. machines, roads, tractors
Money - ANS nonproductive capital. Represents a firms ability to purchase capital
Entrepreneurship - ANS Bringing together land, labor, and capital to create a good
Technology - ANS not listed as an input, it is the recipe by which we bring together land,
labor, and capital
1 @COPYRIGHT 2025/2026 ALLRIGHTS RESERVED.
,Positive Economics - ANS What does the world look like and how are things allocated.
generally made up of statements or facts.
Normative Economics - ANS How should the world work and how should things be allocated.
generally normative statements are value laden statements
Microeconomics - ANS understanding how we allocate particular goods and resources . labor
markets
ex. Buying apples vs. buying cars
Macroeconomics - ANS How nations make trade-offs in times of aggregate spending and
production, and in public policy, and the consequences of these trade offs
ex. labor markets, GDP
resource payment - ANS Land // Rent
Labor // Wage
Capital // Interest
Entrepreneurship // Profit
What is Value? - ANS What are we willing to give up to get something we want
value does not equal price
Opportunity Price - ANS The thing or activity we give up to get what we want or do what we
do. The MOST valuable thing we give up
Sacristy Principle - ANS The opportunity cost of spending more times on any activity is having
less time avialable to spend on others
2 @COPYRIGHT 2025/2026 ALLRIGHTS RESERVED.
, Absolute Advantage - ANS When one person (firm or country) can produce a good with less
time or resources
Comparative Advantage - ANS When one person (firm or country) is she/he/they can
produce a good at a lower opportunity cost than another
Law of Demand - ANS The (usually) inverse relationship between price and quantity
Demand Schedule - ANS A tabular listing of price and quantity
Demand Course - ANS Graphed representation of demand, downward slope says the lower
the price the more we want
Change in Quantity Demanded - ANS moving along the demand curve, price change causes a
change in the number of units we buy
Change in Demand - ANS Shift the demand curve, change in # of units NOT price
Determinate of demand - ANS 1) Tastes and Preferences
2) Change in income
3)Price of related goods
4) Expectations
5) Number of buyers in the market
Normal Good - ANS a good where demand increases as income increases
Inferior good - ANS a good where demand decreases as income increases
Substitutes - ANS Goods we consume one instead of another
3 @COPYRIGHT 2025/2026 ALLRIGHTS RESERVED.
QUESTIONS AND ANSWERS 100% PASS.
What is economics? - ANS The social science that studies production, distribution, and
consumption of goods and serves // the study of the allocation of limited resources across
unlimited wants
What does an economist examine? - ANS who gets what, how, why, and when
Land - ANS Inputs that exist in the world around us, sometimes called natural resources
ex. water, air, plants, dirt
Labor - ANS Human input, sometimes called human capital.
ex. blue collar workers, white collar workers
Capital - ANS Human-made inputs, stuff that makes stuff.
ex. machines, roads, tractors
Money - ANS nonproductive capital. Represents a firms ability to purchase capital
Entrepreneurship - ANS Bringing together land, labor, and capital to create a good
Technology - ANS not listed as an input, it is the recipe by which we bring together land,
labor, and capital
1 @COPYRIGHT 2025/2026 ALLRIGHTS RESERVED.
,Positive Economics - ANS What does the world look like and how are things allocated.
generally made up of statements or facts.
Normative Economics - ANS How should the world work and how should things be allocated.
generally normative statements are value laden statements
Microeconomics - ANS understanding how we allocate particular goods and resources . labor
markets
ex. Buying apples vs. buying cars
Macroeconomics - ANS How nations make trade-offs in times of aggregate spending and
production, and in public policy, and the consequences of these trade offs
ex. labor markets, GDP
resource payment - ANS Land // Rent
Labor // Wage
Capital // Interest
Entrepreneurship // Profit
What is Value? - ANS What are we willing to give up to get something we want
value does not equal price
Opportunity Price - ANS The thing or activity we give up to get what we want or do what we
do. The MOST valuable thing we give up
Sacristy Principle - ANS The opportunity cost of spending more times on any activity is having
less time avialable to spend on others
2 @COPYRIGHT 2025/2026 ALLRIGHTS RESERVED.
, Absolute Advantage - ANS When one person (firm or country) can produce a good with less
time or resources
Comparative Advantage - ANS When one person (firm or country) is she/he/they can
produce a good at a lower opportunity cost than another
Law of Demand - ANS The (usually) inverse relationship between price and quantity
Demand Schedule - ANS A tabular listing of price and quantity
Demand Course - ANS Graphed representation of demand, downward slope says the lower
the price the more we want
Change in Quantity Demanded - ANS moving along the demand curve, price change causes a
change in the number of units we buy
Change in Demand - ANS Shift the demand curve, change in # of units NOT price
Determinate of demand - ANS 1) Tastes and Preferences
2) Change in income
3)Price of related goods
4) Expectations
5) Number of buyers in the market
Normal Good - ANS a good where demand increases as income increases
Inferior good - ANS a good where demand decreases as income increases
Substitutes - ANS Goods we consume one instead of another
3 @COPYRIGHT 2025/2026 ALLRIGHTS RESERVED.
