PRINCIPLES OF ECONOMICS EXAM 1 |
STUDY GUIDE | QUESTIONS AND ANSWERS
| EXAM PREP| GRADED A+ | GUARANTEED
SUCCESS
Updated Questions and Answers | 100% Verified Exam Prep
, Microeconomics -examines the behavior of specific decision making units
Functioning of individual parts of the economy
Ex. Business firms, households, consumers
Examples
How does Coca Cola decide how many coke cans to produce?
What determines the price of gas?
The impact of an increase in steel pric
Macroeconomics -Looks at the economy as a whole, not as individual parts
-We aggregate (add up) the micro parts to come up with the overall picture
Examples:
-GDP
-CPI
-Inflation and Deflation
-Total employment and unemployment
Gross Domestic Product (GDP) total output of all goods and services produced within the boundaries of a country
(tangible(food, clothing, cars) and intangible goods (haircuts, house cleaning, doctor's
visits))
Consumer Price Index (CPI) The average level of prices of all consumer goods and services
Economics the study of how scarce resources are allocated among their competing uses
-it's about limited resources and unlimited wants
Factors of production (resources) land, labor, capital, entrepreneurship (LLEC)
Land -encompasses the land that production takes place and all natural resources: water,
sheep, cows, metal, timber, minerals
-Renewable and non-renewable resources
Labor -the physical and mental abilities of workers
-Quantity and quality (human capital)
-Fixed wages
Capital -goods produced in the economy that are used to produce other goods and services
-Machines, tools, structures (buildings, factories)
STUDY GUIDE | QUESTIONS AND ANSWERS
| EXAM PREP| GRADED A+ | GUARANTEED
SUCCESS
Updated Questions and Answers | 100% Verified Exam Prep
, Microeconomics -examines the behavior of specific decision making units
Functioning of individual parts of the economy
Ex. Business firms, households, consumers
Examples
How does Coca Cola decide how many coke cans to produce?
What determines the price of gas?
The impact of an increase in steel pric
Macroeconomics -Looks at the economy as a whole, not as individual parts
-We aggregate (add up) the micro parts to come up with the overall picture
Examples:
-GDP
-CPI
-Inflation and Deflation
-Total employment and unemployment
Gross Domestic Product (GDP) total output of all goods and services produced within the boundaries of a country
(tangible(food, clothing, cars) and intangible goods (haircuts, house cleaning, doctor's
visits))
Consumer Price Index (CPI) The average level of prices of all consumer goods and services
Economics the study of how scarce resources are allocated among their competing uses
-it's about limited resources and unlimited wants
Factors of production (resources) land, labor, capital, entrepreneurship (LLEC)
Land -encompasses the land that production takes place and all natural resources: water,
sheep, cows, metal, timber, minerals
-Renewable and non-renewable resources
Labor -the physical and mental abilities of workers
-Quantity and quality (human capital)
-Fixed wages
Capital -goods produced in the economy that are used to produce other goods and services
-Machines, tools, structures (buildings, factories)
