Econ 101 Final Exam UPDATED Exam Questions and CORRECT Answers
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Course
Econ 101
Institution
Econ 101
Econ 101 Final Exam UPDATED Exam
Questions and CORRECT Answers
factors of production - CORRECT ANSWER -inputs used to produce goods and services
production function - CORRECT ANSWER -the relationship between the quantity of inputs
used to make a good and the quantity of output of a good
marg...
Econ 101 Final Exam UPDATED Exam
Questions and CORRECT Answers
factors of production - CORRECT ANSWER -inputs used to produce goods and services
production function - CORRECT ANSWER -the relationship between the quantity of inputs
used to make a good and the quantity of output of a good
marginal product of labor - CORRECT ANSWER -the increase in the amount of output from
an additional unit of labor
diminishing marginal product - CORRECT ANSWER -the proper whereby the marginal
product of an input declines as the quantity of the input increases
versatility of supply and demand - CORRECT ANSWER -supply and demand determine
price and wage
value of the marginal product - CORRECT ANSWER -the marginal product of an input
times the price of the output
the production function - CORRECT ANSWER -the relationship between the inputs of
production and the outputs of production; as quantity rises, the production function gets flatter
(diminishing marginal product)
the value of the marginal product of labor - CORRECT ANSWER -the value of the marginal
product depends on the number of workers; curve slopes downwards (diminishing marginal
product)
reasons the labor demand curve might shift - CORRECT ANSWER -output price,
technological change, supply of other factors
,reasons the labor supply curve might shift - CORRECT ANSWER -changes in tastes,
changes in alternative opportunities, immigration
wage - CORRECT ANSWER -the value marginal product of labor; adjusts to balance supply
and demand for labor
wage equilibrium in the labor market - CORRECT ANSWER -workers receive the value of
their marginal contribution to the production of goods and services
positive shift in labor supply - CORRECT ANSWER -reduces wage and raises
unemployment
positive shift in labor demand - CORRECT ANSWER -increases wage and increases
employment
capital - CORRECT ANSWER -the equipment and structures used to produce goods and
services
markets for land and capital - CORRECT ANSWER -supply and demand determine the
compensation paid to owners of land and compensation paid to owners of capital; the demand of
each factor depends on the value of the marginal product of that factor
compensation differential - CORRECT ANSWER -a difference in wages that arises to offset
the non-monetary characteristics of different jobs
human capital - CORRECT ANSWER -the accumulation of investments in people, such as
education and on the job training; natural ability and effort are key
signaling theory - CORRECT ANSWER -the idea that it is rational for firms to interpret a
college degree as a signal of ability
, reasons why superstars occur in the market - CORRECT ANSWER -customers in the market
want to enjoy the good produced by the best supplier; the good is produced with technology that
ensures that the best product is distributed at a low cost to all customers
union - CORRECT ANSWER -a worker association that bargains with employers over
wages and working conditions
strike - CORRECT ANSWER -the organized withdrawal of labor from a firm by a union
efficiency wages - CORRECT ANSWER -above-equillibrium wages paid by firms to
increase worker activity
discrimination - CORRECT ANSWER -the offering of different opportunities to similar
individuals who differ only by race, ethnic group, sex, age, or other identifiers
poverty rate - CORRECT ANSWER -the percent of the population whose family income
falls below an absolute level called the poverty line; correlated with race, age, and family
composition
poverty line - CORRECT ANSWER -an absolute level of income set by the federal
government for each family size below which a family is deemed to be in poverty
in-kind transfers - CORRECT ANSWER -transfers to the poor given in the form of goods
and services rather than cash
life cycle - CORRECT ANSWER -the regular pattern of income variation over a person's
life
permanent income - CORRECT ANSWER -a person's normal income
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