ECON 101 EXAM #1 IOWA STATE
UNIVERSITY QUESTIONS AND
CORRECT ANSWERS
\.Economics - ANSWERS✔-The study of choice under conditions of scarcity.
\.Scarcity - ANSWERS✔-A situation in which the amount of something available is
insufficient to satisfy the desire for it.
\.Opportunity cost - ANSWERS✔-What is given up when taking an action or
making a choice.
\.Explicit cost - ANSWERS✔-The dollars sacrificed- and actually paid out- for a
choice.
\.Implicit cost - ANSWERS✔-The value of something sacrificed when no direct
payment is made.
\.Resources - ANSWERS✔-The labor, capital, land (including natural resources),
and entrepreneurship that are used to produce goods and services.
, \.Labor - ANSWERS✔-The time human beings spend producing goods and
services.
\.Capital - ANSWERS✔-A long-lasting tool that is used to produce other goods.
\.Physical capital - ANSWERS✔-The part of stock consisting of physical goods, such
as machinery, equipment, and factories.
\.Human capital - ANSWERS✔-The skills and training of the labor force.
\.Capital stock - ANSWERS✔-The total amount of capital in a nation that is
productively useful at a particular point in time.
\.Land - ANSWERS✔-The physical space on which production takes place, as well
as the natural resources that come with it.
\.Entrepreneurship - ANSWERS✔-The ability and willingness to combine the other
resources- labor, capital, and land- into a productive enterprise.
\.Input - ANSWERS✔-Anything (including a resource) used to produce a good or
service.
\.Microeconomics - ANSWERS✔-The study of the behavior of individual
households, firms, and governments; the choices they make; and their interaction
in specific markets.
UNIVERSITY QUESTIONS AND
CORRECT ANSWERS
\.Economics - ANSWERS✔-The study of choice under conditions of scarcity.
\.Scarcity - ANSWERS✔-A situation in which the amount of something available is
insufficient to satisfy the desire for it.
\.Opportunity cost - ANSWERS✔-What is given up when taking an action or
making a choice.
\.Explicit cost - ANSWERS✔-The dollars sacrificed- and actually paid out- for a
choice.
\.Implicit cost - ANSWERS✔-The value of something sacrificed when no direct
payment is made.
\.Resources - ANSWERS✔-The labor, capital, land (including natural resources),
and entrepreneurship that are used to produce goods and services.
, \.Labor - ANSWERS✔-The time human beings spend producing goods and
services.
\.Capital - ANSWERS✔-A long-lasting tool that is used to produce other goods.
\.Physical capital - ANSWERS✔-The part of stock consisting of physical goods, such
as machinery, equipment, and factories.
\.Human capital - ANSWERS✔-The skills and training of the labor force.
\.Capital stock - ANSWERS✔-The total amount of capital in a nation that is
productively useful at a particular point in time.
\.Land - ANSWERS✔-The physical space on which production takes place, as well
as the natural resources that come with it.
\.Entrepreneurship - ANSWERS✔-The ability and willingness to combine the other
resources- labor, capital, and land- into a productive enterprise.
\.Input - ANSWERS✔-Anything (including a resource) used to produce a good or
service.
\.Microeconomics - ANSWERS✔-The study of the behavior of individual
households, firms, and governments; the choices they make; and their interaction
in specific markets.
