NDSU ECON 201 EXAM 1
Economics - Answer-is the study of how a society produces, exchanges, and consumes goods and
services in the face of economic scarcity
Absolute Scarcity - Answer-when resources run out
Economic Scarcity - Answer-people's infinite wants and desires...never enough. about wants, not needs.
Commodities - Answer-satisfy people's wants and desires...goods and services
Goods - Answer-are tangible items (book or car)
Services - Answer-are intangible items (haircut or school)
Production - Answer-is using those resources to make or provide goods and services
Consumption - Answer-is making use of goods and services
Labor - Answer-is all human effort that goes into production
Land - Answer-is all natural resources used for production
, Capital - Answer-is the physical things used in production (machinery, tools, etc.)
Entrepreneurship - Answer-is the innovator or risk taker
Earnings - Answer-labor-wages........................................land-rent
capital-interest......entrepreneurship-profit
Normal Profits - Answer-need to be earned to stay in business
Excess Profits - Answer-what is earned that are over/above normal
What are the three economic agents? - Answer-households, firms, and government
Households - Answer-purchase goods and services while providing goods and services
Firms - Answer-purchase resources (labor/capital) while providing goods and services
Government - Answer-plays a supporting role
Market - Answer-the voluntary exchange between the buyer and the seller of a good or service
What are the two fields of study? - Answer-macroeconomics and microeconomics
Macroeconomics - Answer-is the study of determination of economic aggregates such as total
employment, total output, and the price level
Economics - Answer-is the study of how a society produces, exchanges, and consumes goods and
services in the face of economic scarcity
Absolute Scarcity - Answer-when resources run out
Economic Scarcity - Answer-people's infinite wants and desires...never enough. about wants, not needs.
Commodities - Answer-satisfy people's wants and desires...goods and services
Goods - Answer-are tangible items (book or car)
Services - Answer-are intangible items (haircut or school)
Production - Answer-is using those resources to make or provide goods and services
Consumption - Answer-is making use of goods and services
Labor - Answer-is all human effort that goes into production
Land - Answer-is all natural resources used for production
, Capital - Answer-is the physical things used in production (machinery, tools, etc.)
Entrepreneurship - Answer-is the innovator or risk taker
Earnings - Answer-labor-wages........................................land-rent
capital-interest......entrepreneurship-profit
Normal Profits - Answer-need to be earned to stay in business
Excess Profits - Answer-what is earned that are over/above normal
What are the three economic agents? - Answer-households, firms, and government
Households - Answer-purchase goods and services while providing goods and services
Firms - Answer-purchase resources (labor/capital) while providing goods and services
Government - Answer-plays a supporting role
Market - Answer-the voluntary exchange between the buyer and the seller of a good or service
What are the two fields of study? - Answer-macroeconomics and microeconomics
Macroeconomics - Answer-is the study of determination of economic aggregates such as total
employment, total output, and the price level
