ECN 101 Final Exam with Questions and Answers

ECN 101 Final Exam with Questions and Answers What is economics? ANSWER The study of how individuals and societies manage scarce resources What is the definition of elasticity? ANSWER A measure of how buyers or sellers respond to changing market conditions What is the equation for profit? ANSWER Total Revenue - Total Cost Why is scarcity the fundamental concept of economics? ANSWER Scarcity compels us to make choices What is Price Elasticity of Demand? ANSWER A measure of how the quantity demanded of a good response to a change in its price What is total revenue? What is the equation for total revenue? ANSWER The amount a firm receives from the sale of its output. Price x Quantity What is the difference between microeconomics and macroeconomics? ANSWER Microeconomics- studies the decision-making of individuals and firms and how these decisions are coordinated in markets Macroeconomics- studies economy-wide phenomenon such as aggregate production, unemployment, and inflation What is the basic formula of Price Elasticity of Demand? ANSWER Ep= |% change in QD| / |% change in P|