ECON 111: Principles of
Macroeconomics Exam 1 fully solved
to pass
Economics - ANS ✔✔the social science dealing with the allocation of scarce resources to meet
unlimited wants; science of constrained choice
Social Science - ANS ✔✔a science dealing with human behavior
Allocation - ANS ✔✔distribution, assigning
4 - ANS ✔✔How many factors of production are there?
Factors of Production - ANS ✔✔1.Land
2. Labor
3. Capital
4. Entrepreneurial Ability
Land - ANS ✔✔all natural resources (air, minerals, etc.)
Labor - ANS ✔✔all mental and physical human effort; This includes human capital
Capital - ANS ✔✔tools, equipment, and machinery (includes building) used in production
process; NOT money
ex: power drill, conveyor belt, etc.
, Entrepreneurial Ability - ANS ✔✔individual or group of individuals that takes the risk and pulls
together all of the factors of production
Depreciation - ANS ✔✔tools, equipment, and machinery falling or breaking apart
Factors of Production - ANS ✔✔used to produce goods and services
The Economic Problem - ANS ✔✔Unlimited wants; Human beings have an insatiable desire for
goods and services; Scarce resources and unlimited wants (problem)
Scarcity - ANS ✔✔this requires choice
Choice - ANS ✔✔When you make this something must be given up
Opportunity Cost - ANS ✔✔the most important thing you give up when a choice is made; next
best alternative; second choice; this concept explains or behavior and decision making
Model - ANS ✔✔simplification of reality
Ceteris Paribus - ANS ✔✔other things remaining equal; all other things remaining constant
Production Possibilities - ANS ✔✔model that shows production possibilities
Assumptions for production possibilities - ANS ✔✔1. Two-good economy
2. Resources are efficiently utilized (no idle or unemployed)
3. Technology and resources are fixed
Macroeconomics Exam 1 fully solved
to pass
Economics - ANS ✔✔the social science dealing with the allocation of scarce resources to meet
unlimited wants; science of constrained choice
Social Science - ANS ✔✔a science dealing with human behavior
Allocation - ANS ✔✔distribution, assigning
4 - ANS ✔✔How many factors of production are there?
Factors of Production - ANS ✔✔1.Land
2. Labor
3. Capital
4. Entrepreneurial Ability
Land - ANS ✔✔all natural resources (air, minerals, etc.)
Labor - ANS ✔✔all mental and physical human effort; This includes human capital
Capital - ANS ✔✔tools, equipment, and machinery (includes building) used in production
process; NOT money
ex: power drill, conveyor belt, etc.
, Entrepreneurial Ability - ANS ✔✔individual or group of individuals that takes the risk and pulls
together all of the factors of production
Depreciation - ANS ✔✔tools, equipment, and machinery falling or breaking apart
Factors of Production - ANS ✔✔used to produce goods and services
The Economic Problem - ANS ✔✔Unlimited wants; Human beings have an insatiable desire for
goods and services; Scarce resources and unlimited wants (problem)
Scarcity - ANS ✔✔this requires choice
Choice - ANS ✔✔When you make this something must be given up
Opportunity Cost - ANS ✔✔the most important thing you give up when a choice is made; next
best alternative; second choice; this concept explains or behavior and decision making
Model - ANS ✔✔simplification of reality
Ceteris Paribus - ANS ✔✔other things remaining equal; all other things remaining constant
Production Possibilities - ANS ✔✔model that shows production possibilities
Assumptions for production possibilities - ANS ✔✔1. Two-good economy
2. Resources are efficiently utilized (no idle or unemployed)
3. Technology and resources are fixed
