ECN 1000 Final Exam Study Guide/ Econ 1000 FInal
Exam- CH.1,2,3,4,5,6,10,11,12/Updated
Explain the concept of opportunity cost
is what you could have gained but you chose the other op on instead. if you chose a pizza over
a salad, the opportunity cost would be the nutrients of the healthy salad.
Give 2 determinants of demand
Taste: larger demand if appeals to more people.
Income: if income increases, demand increases
Give 2 determinants of supply
Price of Inputs: if price is lower, supply will increase.
Technology: produce more with the same amount of machines which can increase supply.
Illustrate and explain equilibrium
The point where the amount that consumers want to buy and the amount that firms want to
sell are the same. Where the supply curve and the demand curve cross.
Explain the difference between correla on and causa on
Causa on implies correla on but correla on does not imply causa on.
Explain the concept of rent control
A form of a price ceiling and it's a law that prevents landlords from raising their rates from one
year to the next. This harms landlords but benefits renters.
Explain the concept of minimum wage
The lowest wage that may legally be paid for an hour's work. It is set above the equilibrium
wage. A minimum wage is only relevant if it is above the market wage.
What is a monopoly?
when a single group controls the produc on of a good or service, firm sets prices.
What is perfect compe on?
, A large number of compe tors, such that no one firm can influence the price. The good a firm
sells is indis nguishable from the ones its compe tors sell. There is no legal or economic barrier
to entry or exit in the market.
Explain the concept of infla on
A sustained increase in the general price level of goods and services in an economy over a
period of me.
Illustrate the rela onship between Money Supply and interest rates
The total amount of money in circula on or in existence in a country. The less money means
high interest rates. The more money means low interest rates.
Explain Becker's Ra onal Crime Model?
People see crime as a nego a on to determine if the outcome outweighs the possibility of
ge1ng caught. If risks are taken there will be a bigger reward, play it safe and get a smaller
reward.
Explain the concept of price elas city of demand
The responsiveness of quan ty demanded to a change in price. Elas c: very responsive to
change in price. Inelas c: not as responsive to a change in price.
What is the difference between economic and accoun ng profit?
Economic Cost: all costs, both those that must be paid as well as those incurred in the form of
forgone opportuni es of a business.
Accoun ng Cost: only those costs that must be explicitly paid by the owner of a business.
What is human capital?
A person's ability to create goods and services
What is Gross Domes c Product?
The dollar value of all of the goods and services produced for final sale in the US in a year.
What is the difference between Medicaid and Medicare?
Medicaid covers the poor, typically children.
Medicare covers those over age 65 as well as those who are disabled.
What determines stock prices?
Exam- CH.1,2,3,4,5,6,10,11,12/Updated
Explain the concept of opportunity cost
is what you could have gained but you chose the other op on instead. if you chose a pizza over
a salad, the opportunity cost would be the nutrients of the healthy salad.
Give 2 determinants of demand
Taste: larger demand if appeals to more people.
Income: if income increases, demand increases
Give 2 determinants of supply
Price of Inputs: if price is lower, supply will increase.
Technology: produce more with the same amount of machines which can increase supply.
Illustrate and explain equilibrium
The point where the amount that consumers want to buy and the amount that firms want to
sell are the same. Where the supply curve and the demand curve cross.
Explain the difference between correla on and causa on
Causa on implies correla on but correla on does not imply causa on.
Explain the concept of rent control
A form of a price ceiling and it's a law that prevents landlords from raising their rates from one
year to the next. This harms landlords but benefits renters.
Explain the concept of minimum wage
The lowest wage that may legally be paid for an hour's work. It is set above the equilibrium
wage. A minimum wage is only relevant if it is above the market wage.
What is a monopoly?
when a single group controls the produc on of a good or service, firm sets prices.
What is perfect compe on?
, A large number of compe tors, such that no one firm can influence the price. The good a firm
sells is indis nguishable from the ones its compe tors sell. There is no legal or economic barrier
to entry or exit in the market.
Explain the concept of infla on
A sustained increase in the general price level of goods and services in an economy over a
period of me.
Illustrate the rela onship between Money Supply and interest rates
The total amount of money in circula on or in existence in a country. The less money means
high interest rates. The more money means low interest rates.
Explain Becker's Ra onal Crime Model?
People see crime as a nego a on to determine if the outcome outweighs the possibility of
ge1ng caught. If risks are taken there will be a bigger reward, play it safe and get a smaller
reward.
Explain the concept of price elas city of demand
The responsiveness of quan ty demanded to a change in price. Elas c: very responsive to
change in price. Inelas c: not as responsive to a change in price.
What is the difference between economic and accoun ng profit?
Economic Cost: all costs, both those that must be paid as well as those incurred in the form of
forgone opportuni es of a business.
Accoun ng Cost: only those costs that must be explicitly paid by the owner of a business.
What is human capital?
A person's ability to create goods and services
What is Gross Domes c Product?
The dollar value of all of the goods and services produced for final sale in the US in a year.
What is the difference between Medicaid and Medicare?
Medicaid covers the poor, typically children.
Medicare covers those over age 65 as well as those who are disabled.
What determines stock prices?
