ECO 304K EXAM 1 Solved Exam
Questions and Answers (Complete
Practice
economics - CORRECT ANSWERS the study of how society allocates its scarce or limited
resources to satisfy as many unlimited wants as possible
land - CORRECT ANSWERS natural resources, such as minerals, forests, water, and unimproved
land
labor - CORRECT ANSWERS physical and mental talents that people contribute to the
production process, such as a person building a house
capital - CORRECT ANSWERS produced goods that can be used as inputs for further
production, such as factories, tools, computers, machines, buildings
microeconomics - CORRECT ANSWERS human behavior/choices as they relate to small units;
ex. single price, demand for particular good, etc.
positive - CORRECT ANSWERS attempts to determine what is; ex. determincy effect
normative - CORRECT ANSWERS addresses what should be; ex. asking "should this have
happened?"
opportunity cost - CORRECT ANSWERS the value of what certain resources could have
produced in the "best" alternative way; ex. reading a book instead of watching tv; very subjective
points inside PPF - CORRECT ANSWERS attainable but undesirable
, points outside PPF - CORRECT ANSWERS not possible but desirable
PPF (production possibilities frontier) - CORRECT ANSWERS graphical representation of
opportunity cost
bowed outward PPF - CORRECT ANSWERS shows increasing opportunity costs
law of increasing opportunity costs - CORRECT ANSWERS as more of a good is produced, the
opportunity cost of producing that good increase
a "market" - CORRECT ANSWERS a group of buyers and sellers of a particular good or service
"meet" to engage in trade
market examples - CORRECT ANSWERS physical location (farmer's market), multiple locations
(Austin's real estate market), or virtual (global financial markets)
demanders - CORRECT ANSWERS are the buyers of the goods or service
suppliers - CORRECT ANSWERS are the sellers of the good or service
demand - CORRECT ANSWERS a price and quantity relationship from the buyer's perspective
law of demand - CORRECT ANSWERS ceteris paribus, as price declines buyers have both the
incentive and ability to buy more; or, as prices increasers, buyers will buy less
demand function - CORRECT ANSWERS =a+bP
Questions and Answers (Complete
Practice
economics - CORRECT ANSWERS the study of how society allocates its scarce or limited
resources to satisfy as many unlimited wants as possible
land - CORRECT ANSWERS natural resources, such as minerals, forests, water, and unimproved
land
labor - CORRECT ANSWERS physical and mental talents that people contribute to the
production process, such as a person building a house
capital - CORRECT ANSWERS produced goods that can be used as inputs for further
production, such as factories, tools, computers, machines, buildings
microeconomics - CORRECT ANSWERS human behavior/choices as they relate to small units;
ex. single price, demand for particular good, etc.
positive - CORRECT ANSWERS attempts to determine what is; ex. determincy effect
normative - CORRECT ANSWERS addresses what should be; ex. asking "should this have
happened?"
opportunity cost - CORRECT ANSWERS the value of what certain resources could have
produced in the "best" alternative way; ex. reading a book instead of watching tv; very subjective
points inside PPF - CORRECT ANSWERS attainable but undesirable
, points outside PPF - CORRECT ANSWERS not possible but desirable
PPF (production possibilities frontier) - CORRECT ANSWERS graphical representation of
opportunity cost
bowed outward PPF - CORRECT ANSWERS shows increasing opportunity costs
law of increasing opportunity costs - CORRECT ANSWERS as more of a good is produced, the
opportunity cost of producing that good increase
a "market" - CORRECT ANSWERS a group of buyers and sellers of a particular good or service
"meet" to engage in trade
market examples - CORRECT ANSWERS physical location (farmer's market), multiple locations
(Austin's real estate market), or virtual (global financial markets)
demanders - CORRECT ANSWERS are the buyers of the goods or service
suppliers - CORRECT ANSWERS are the sellers of the good or service
demand - CORRECT ANSWERS a price and quantity relationship from the buyer's perspective
law of demand - CORRECT ANSWERS ceteris paribus, as price declines buyers have both the
incentive and ability to buy more; or, as prices increasers, buyers will buy less
demand function - CORRECT ANSWERS =a+bP
