Econ 1001 Exam 1
with complete verified
solutions
Economics - answer the study of how people use their scarce resources to
satisfy their unlimited wants
Resources - answer the inputs, or factors of production, used to produce the
goods and services that people want
consist of labor, natural resources, and entrepreneurial ability
Labor - answer the physical and mental effort used to produce goods and
services
Capital - answer the buildings, equipment, and human skills used to produce
goods and services
infrastructure
Natural Resources - answer all gifts of nature used to produce goods and
services
includes renewable and exhaustible resources
Entrepreneurial Ability - answer the imagination required to develop a new
product or process, the skill needed to organize production, and the
willingness to take the risk of profit or loss
Entrepreneur - answer a profit-seeking decision maker who starts with an
idea, organizes an enterprise to bring that idea to life, and assumes the risk
of the operation
,Wages - answer payment to resource owners for their labor
Interest - answer payment to resource owners for the use of their capital
Rent - answer reward for entrepreneurial ability
sales - resource cost
Good - answer a tangible (physical properties) product to satisfy human
wants
Service - answer an activity, or intangible product, used to satisfy human
wants
examples: accounting, haircut, garbage, maintenance, teaching, banking,
cedar point, kings island, concerts
Scarcity - answer occurs when the amount people desire exceeds the
amount available at a zero price
Market - answer a set of arrangements by which buyers and sellers carry out
exchange at mutually agreeable terms
Product Market - answer a market in which a good or service is bought and
sold (customers)
Resource Market - answer a market in which a resource is bought and sold
(business)
Circular-Flow Model - answer a diagram that traces the flow of resources,
products, income, and revenue among economic decision makers
, Rational Self Interest - answer each individual tries to maximize the expected
benefit achieved with a given cost or to minimize the expected cost of
achieving a given benefit
Marginal - answer incremental, additional, or extra
used to describe a change in an economic variable
***PLUS ONE, additional***
Microeconomics - answer the study of economic behavior in particular
markets, such as that for computers or unskilled labor
Macroeconomics - answer the study of the economic behavior of entire
economies, as measured, for example, by total production employment
(Gross Domestic Profit; GDP)
Economic Fluctuations - answer the rise and fall of economic activity relative
to the long-term growth trend of the economy
AKA Business Cycles
Economic Theory (Model) - answer a simplification of reality used to make
predictions about cause and effect in the real world
The Scientific Method - answer ...begin with a question...
Variable - answer a measure, such as price or quantity, that can take on
different values at different times
Other-Things-Constant Assumption - answer the assumption, when focusing
on the relation among key economic variables, that other variables remain
unchanged, in Latin, Ceteris Paribus
with complete verified
solutions
Economics - answer the study of how people use their scarce resources to
satisfy their unlimited wants
Resources - answer the inputs, or factors of production, used to produce the
goods and services that people want
consist of labor, natural resources, and entrepreneurial ability
Labor - answer the physical and mental effort used to produce goods and
services
Capital - answer the buildings, equipment, and human skills used to produce
goods and services
infrastructure
Natural Resources - answer all gifts of nature used to produce goods and
services
includes renewable and exhaustible resources
Entrepreneurial Ability - answer the imagination required to develop a new
product or process, the skill needed to organize production, and the
willingness to take the risk of profit or loss
Entrepreneur - answer a profit-seeking decision maker who starts with an
idea, organizes an enterprise to bring that idea to life, and assumes the risk
of the operation
,Wages - answer payment to resource owners for their labor
Interest - answer payment to resource owners for the use of their capital
Rent - answer reward for entrepreneurial ability
sales - resource cost
Good - answer a tangible (physical properties) product to satisfy human
wants
Service - answer an activity, or intangible product, used to satisfy human
wants
examples: accounting, haircut, garbage, maintenance, teaching, banking,
cedar point, kings island, concerts
Scarcity - answer occurs when the amount people desire exceeds the
amount available at a zero price
Market - answer a set of arrangements by which buyers and sellers carry out
exchange at mutually agreeable terms
Product Market - answer a market in which a good or service is bought and
sold (customers)
Resource Market - answer a market in which a resource is bought and sold
(business)
Circular-Flow Model - answer a diagram that traces the flow of resources,
products, income, and revenue among economic decision makers
, Rational Self Interest - answer each individual tries to maximize the expected
benefit achieved with a given cost or to minimize the expected cost of
achieving a given benefit
Marginal - answer incremental, additional, or extra
used to describe a change in an economic variable
***PLUS ONE, additional***
Microeconomics - answer the study of economic behavior in particular
markets, such as that for computers or unskilled labor
Macroeconomics - answer the study of the economic behavior of entire
economies, as measured, for example, by total production employment
(Gross Domestic Profit; GDP)
Economic Fluctuations - answer the rise and fall of economic activity relative
to the long-term growth trend of the economy
AKA Business Cycles
Economic Theory (Model) - answer a simplification of reality used to make
predictions about cause and effect in the real world
The Scientific Method - answer ...begin with a question...
Variable - answer a measure, such as price or quantity, that can take on
different values at different times
Other-Things-Constant Assumption - answer the assumption, when focusing
on the relation among key economic variables, that other variables remain
unchanged, in Latin, Ceteris Paribus
