ECO201 Final Exam - Miami University -
Professor Elliot
The definition of supply assumes there is always a positive relationship between price
and quantity supplied - ANS-False
Land - ANS-inputs that exist around us - "natural resources"
Labor - ANS-Human input/capital - any input from people
Capital - ANS-stuff that makes stuff - things we produce that we then use to produce
things
Money is capital - ANS-false
Entrepreneurship - ANS-the process of bringing together land, labor, and capital to
create a good
Technology is capital - ANS-true
postive economics - ANS-the branch of economic analysis that describes the way the
economy actually works - what does the world look like
normative economics - ANS-how SHOULD the world work and how SHOULD things be
allocated
Free Markets - ANS-influenced by market participants without government influence in
markets
Economic tradeoff - ANS-Resources are limited so we must receive something for
giving them up
Land earns - ANS-rent
Labor earns - ANS-wages
capital earns - ANS-interest
, Entrepreneurship earns - ANS-profit
opportunity cost - ANS-the most desirable alternative given up as the result of a
decision
Scarcity Principle - ANS-I am going to do things that I am good at because it will be less
opportunity cost to me - I will not do things that I am not good at as it will be more
opportunity cost for me
Productions Possibilities Curve - ANS-All the possible combinations that a producer
may produce of two distinct products given the resources and technology
Why is the PPC bowed outwards? - ANS-Resources are scarce so you cannot always
produce items on a one to one scale - it represents opportunity cost
Absolute Advantage - ANS-when one person (firm or country) can produce a good
using less time or resources than another
Comparative Advantage - ANS-When a person (firm or country) can produce a good at
a lower opportunity cost - this is at the hub of international trade
Producing at a point inside the production possibilities curve - ANS-is inefficient
Demand - ANS-the relationship between people who want to buy things and the price of
that
The demand curve is _____ sloped - ANS-downward
Law of Demand - ANS-consumers will buy more of a good when its price is lower and
less when its price is higher
A change in quantity demanded is a - ANS-move along a given demand curve (price
change)
A change in demand is a - ANS-shift of the demand curve (unit change)
Determinants of Demand - ANS-tastes, income, price of other goods, expectations,
number of buyers
Professor Elliot
The definition of supply assumes there is always a positive relationship between price
and quantity supplied - ANS-False
Land - ANS-inputs that exist around us - "natural resources"
Labor - ANS-Human input/capital - any input from people
Capital - ANS-stuff that makes stuff - things we produce that we then use to produce
things
Money is capital - ANS-false
Entrepreneurship - ANS-the process of bringing together land, labor, and capital to
create a good
Technology is capital - ANS-true
postive economics - ANS-the branch of economic analysis that describes the way the
economy actually works - what does the world look like
normative economics - ANS-how SHOULD the world work and how SHOULD things be
allocated
Free Markets - ANS-influenced by market participants without government influence in
markets
Economic tradeoff - ANS-Resources are limited so we must receive something for
giving them up
Land earns - ANS-rent
Labor earns - ANS-wages
capital earns - ANS-interest
, Entrepreneurship earns - ANS-profit
opportunity cost - ANS-the most desirable alternative given up as the result of a
decision
Scarcity Principle - ANS-I am going to do things that I am good at because it will be less
opportunity cost to me - I will not do things that I am not good at as it will be more
opportunity cost for me
Productions Possibilities Curve - ANS-All the possible combinations that a producer
may produce of two distinct products given the resources and technology
Why is the PPC bowed outwards? - ANS-Resources are scarce so you cannot always
produce items on a one to one scale - it represents opportunity cost
Absolute Advantage - ANS-when one person (firm or country) can produce a good
using less time or resources than another
Comparative Advantage - ANS-When a person (firm or country) can produce a good at
a lower opportunity cost - this is at the hub of international trade
Producing at a point inside the production possibilities curve - ANS-is inefficient
Demand - ANS-the relationship between people who want to buy things and the price of
that
The demand curve is _____ sloped - ANS-downward
Law of Demand - ANS-consumers will buy more of a good when its price is lower and
less when its price is higher
A change in quantity demanded is a - ANS-move along a given demand curve (price
change)
A change in demand is a - ANS-shift of the demand curve (unit change)
Determinants of Demand - ANS-tastes, income, price of other goods, expectations,
number of buyers
