Exam (elaborations)
ECO 201 Exam Detailed Questions and Expert Answers
- Course
- ECO 201
- Institution
- Southern New Hampshire University
ECO 201 Exam Detailed Questions and Expert Answers
[Show more]
Content preview
ECO 201 Exam Detailed Questions and ExpertAnswers
Economics - ANS the study of the choices that individuals make given the presence
of scarcity
scarcity - ANS limited resources but unlimited wants
types of resources (a.k.a. factors of production) - ANS 1. land: natural resources
2. nonhuman and animal resources: leather, meat, fur
3. labor: human capital (physical and mental)
4. capital: resources produced using land and labor to make other things
5. technology: always changing, but still scarce
6. entrepreneurial ability: knowledge/willingness to take a chance to make things
happen
*these are combined to produce commodities: economic goods and services*
the ten (eight) principles of economics - ANS 1. people face trade-offs: scarcity
forces us to make choices
2. the cost of something is what you give up to get it
3. rational people weigh costs and benefits and think and the margin
4. people respond to incentives (in predictable ways)
5. trade can make everyone better off
,6. markets are usually a good way to organize economic activity
7. governments can sometimes improve market outcomes
8. a country's standard of living depends on its ability to produce goods and
services
opportunity cost - ANS highest value benefit forgone due to choosing an
alternative
the three economic questions - ANS 1. what and how much to produce?
2. how to produce?
3. for whom to produce?
the economy - ANS the institutional structure through which individuals in a
society coordinate their diverse wants
efficiency - ANS the property of society getting the most it can from its scarce
resources (size of the economic pie)
equality - ANS the property of distributing economic prosperity uniformly among
the members of society (how the economic pie is sliced)
sunk cost - ANS a cost that has already been incurred and cannot be recovered
economically rational - ANS it is rational if you weigh the costs and benefits
, marginal thinking - ANS requires decision-makers to evaluate whether the benefit
of one more unit of something is greater than its cost
marginal analysis - ANS analysis that involves comparing marginal benefits and
marginal costs
the economic decision rule - ANS if the marginal benefit is greater than the
marginal cost do it
we do things to the point where...? - ANS marginal benefit=marginal cost
five facts about trade - ANS 1. trade is not a zero-sum game
2. by channeling goods and resources to those who value them most, *trade
creates value* and increases the wealth created by society's resources
3. transaction costs can inhibit trade
4. the middleman reduces costs
5. as trade restrictions are lifted, more value is created from trade
not a zero-sum game - ANS when individuals engage in a voluntary exchange, both
parties are made better off
transaction cost - ANS the time and effort needed to search out, negotiate, and
complete an exchange
The benefits of buying summaries with Stuvia:
Guaranteed quality through customer reviews
Stuvia customers have reviewed more than 700,000 summaries. This how you know that you are buying the best documents.
Quick and easy check-out
You can quickly pay through credit card or Stuvia-credit for the summaries. There is no membership needed.
Focus on what matters
Your fellow students write the study notes themselves, which is why the documents are always reliable and up-to-date. This ensures you quickly get to the core!
Frequently asked questions
What do I get when I buy this document?
You get a PDF, available immediately after your purchase. The purchased document is accessible anytime, anywhere and indefinitely through your profile.
Satisfaction guarantee: how does it work?
Our satisfaction guarantee ensures that you always find a study document that suits you well. You fill out a form, and our customer service team takes care of the rest.
Who am I buying these notes from?
Stuvia is a marketplace, so you are not buying this document from us, but from seller Schoolflix. Stuvia facilitates payment to the seller.
Will I be stuck with a subscription?
No, you only buy these notes for $15.49. You're not tied to anything after your purchase.
Can Stuvia be trusted?
4.6 stars on Google & Trustpilot (+1000 reviews)
67096 documents were sold in the last 30 days
Founded in 2010, the go-to place to buy study notes for 14 years now