C201 EXAM STUDY GUIDE+QUESTIONS AND
VERIFIED ANSWERS
Factors of Production- Natural Resources, Capital, Human Resources, Entrepreneurship
NATURAL RESOURCES: land, building sites, forests, mineral deposits.
CAPITAL: technology, tools, information, physical facilities, financial capabilities.
HUMAN RESOURCES: physical labor, intellectual input by employees.
Entrepreneurship: risks to run business
Demand, Supply
Demand- buyers purchase product at varying prices willingly, Suppy- the amount of product
for sale at different prices
Economics
A balance between what is wanted and what can be afforded. How much to save/how
much to spend. We must decide among product and services competing for our attention.
Factors of Production
natural resources, capital, human resources, and entrepreneurship.
Pure Competition
Market structure where large numbers of buyers and sellers exchange homogeneous
products and no participant has influence on price. Prices are set by market as forces of
supply and demand interact.
monopolistic competition
Market structure where buyers and sellers exchanged differentiated heterogeneous
product, each participant has some control over price.
Monopoly
,Market structure where a single seller dominates trade in a good or service for which
buyers can find no close substitutes
Regulated monopolies
Local, state, federal government grants exclusive rights in a certain market to a single firm.
Four stages of the business cycle: Prosperity, Recession, Depression, Recovery
PROSPERITY: low unemployment and strong consumer confidence. RECESSION: consumers
postpone major purchases, layoffs, and decreased household savings. DEPRESSION:
economic slowdown continues in a downward spiral over a long period of time. RECOVERY:
consumer spending increases, business activity accelerates.
Mixed-Market Economy
Countries with mixed-market economies draw from both types. In nations considered to
have private enterprise systems, gov owned firms often operate alongside
Student Loan Marketing Association (SLMA)
Governments may privatize state-owned enterprises to raise funds/improve economy. Goal
is cut costs, run operation better. SLMA is example
Recession
cyclical economic contraction that lasts for six months or longer. In a recession, productivity
stalls or declines
Productivity
relationship between goods and services produced in nation each year and the inputs
needed to produce them.
Total productivity considers all inputs necessary to produce a specific amount of outputs.
Equation:
,Total Productivity= output divided by input
Total Productivity= OUTPUT goods or services produced divided by INPUT human/natural
resources, capital
Gross domestic product (GDP)
the sum of all goods within its boundaries. Total GDP is based on per-capita output of a
country, total national output divided by # of citizens National output divided by number of
citizens
Gross domestic product (GDP) is tracked by
Bureau of Economic Analysis BEA a division of the U.S. Dept. of Commerce.
Core Inflation Rate
The inflation rate of an economy after energy and food prices are removed
Hyperinflation
Extreme situations where an economic situation is characterized by soaring prices
Consumer Price Index (CPI)
the government tracks changes in price levels with CPI, measures monthly average changes
in products.
U.S. Bureau of Labor Statistics (BLS)
Calculates the Consumer Price Index (CPI) monthly based on prices of a 'MARKET BASKET' a
compilation of produce most often purchased by urban consumers
frictional unemployment
temporarily not working but looking for jobs
Seasonal unemployment
joblessness of seasonal industry
, Cyclical unemployment
people who are out of work because of a cyclical contraction in the economy
Structural unemployment
people who remain unemployed for long periods, with little hope of new jobs like old ones.
The Federal Open Market Committee (FOMC)
Oversees nation's open market operations, buying and selling treasury securities
Balanced Budget
Total revenues raised by taxes equal the total proposed spending for the year
Define microeconomics and macroeconomics
Microeconomics is the study of economic behavior among individual consumers, families,
and businesses. Macroeconomics is the study of a nation's overall economic issues and how
an economic system maintains and allocates its resources.
Explain demand and supply curves.
A demand curve is a graph of the amount of a product that buyers will purchase at different
prices. A supply curve shows the relationship between different prices and the quantities
that sellers will offer for sale, regardless of demand.
How do factors of production influence the overall supply of goods and services?
A change in the cost or availability of any of the inputs considered to be factors of
production can shift the entire supply curve, either increasing or decreasing the amount
available at every price.
What is the difference between pure competition and monopolistic competition?
VERIFIED ANSWERS
Factors of Production- Natural Resources, Capital, Human Resources, Entrepreneurship
NATURAL RESOURCES: land, building sites, forests, mineral deposits.
CAPITAL: technology, tools, information, physical facilities, financial capabilities.
HUMAN RESOURCES: physical labor, intellectual input by employees.
Entrepreneurship: risks to run business
Demand, Supply
Demand- buyers purchase product at varying prices willingly, Suppy- the amount of product
for sale at different prices
Economics
A balance between what is wanted and what can be afforded. How much to save/how
much to spend. We must decide among product and services competing for our attention.
Factors of Production
natural resources, capital, human resources, and entrepreneurship.
Pure Competition
Market structure where large numbers of buyers and sellers exchange homogeneous
products and no participant has influence on price. Prices are set by market as forces of
supply and demand interact.
monopolistic competition
Market structure where buyers and sellers exchanged differentiated heterogeneous
product, each participant has some control over price.
Monopoly
,Market structure where a single seller dominates trade in a good or service for which
buyers can find no close substitutes
Regulated monopolies
Local, state, federal government grants exclusive rights in a certain market to a single firm.
Four stages of the business cycle: Prosperity, Recession, Depression, Recovery
PROSPERITY: low unemployment and strong consumer confidence. RECESSION: consumers
postpone major purchases, layoffs, and decreased household savings. DEPRESSION:
economic slowdown continues in a downward spiral over a long period of time. RECOVERY:
consumer spending increases, business activity accelerates.
Mixed-Market Economy
Countries with mixed-market economies draw from both types. In nations considered to
have private enterprise systems, gov owned firms often operate alongside
Student Loan Marketing Association (SLMA)
Governments may privatize state-owned enterprises to raise funds/improve economy. Goal
is cut costs, run operation better. SLMA is example
Recession
cyclical economic contraction that lasts for six months or longer. In a recession, productivity
stalls or declines
Productivity
relationship between goods and services produced in nation each year and the inputs
needed to produce them.
Total productivity considers all inputs necessary to produce a specific amount of outputs.
Equation:
,Total Productivity= output divided by input
Total Productivity= OUTPUT goods or services produced divided by INPUT human/natural
resources, capital
Gross domestic product (GDP)
the sum of all goods within its boundaries. Total GDP is based on per-capita output of a
country, total national output divided by # of citizens National output divided by number of
citizens
Gross domestic product (GDP) is tracked by
Bureau of Economic Analysis BEA a division of the U.S. Dept. of Commerce.
Core Inflation Rate
The inflation rate of an economy after energy and food prices are removed
Hyperinflation
Extreme situations where an economic situation is characterized by soaring prices
Consumer Price Index (CPI)
the government tracks changes in price levels with CPI, measures monthly average changes
in products.
U.S. Bureau of Labor Statistics (BLS)
Calculates the Consumer Price Index (CPI) monthly based on prices of a 'MARKET BASKET' a
compilation of produce most often purchased by urban consumers
frictional unemployment
temporarily not working but looking for jobs
Seasonal unemployment
joblessness of seasonal industry
, Cyclical unemployment
people who are out of work because of a cyclical contraction in the economy
Structural unemployment
people who remain unemployed for long periods, with little hope of new jobs like old ones.
The Federal Open Market Committee (FOMC)
Oversees nation's open market operations, buying and selling treasury securities
Balanced Budget
Total revenues raised by taxes equal the total proposed spending for the year
Define microeconomics and macroeconomics
Microeconomics is the study of economic behavior among individual consumers, families,
and businesses. Macroeconomics is the study of a nation's overall economic issues and how
an economic system maintains and allocates its resources.
Explain demand and supply curves.
A demand curve is a graph of the amount of a product that buyers will purchase at different
prices. A supply curve shows the relationship between different prices and the quantities
that sellers will offer for sale, regardless of demand.
How do factors of production influence the overall supply of goods and services?
A change in the cost or availability of any of the inputs considered to be factors of
production can shift the entire supply curve, either increasing or decreasing the amount
available at every price.
What is the difference between pure competition and monopolistic competition?
