Economics 201 Final Exam
Questions and Answers 100% Pass
Definition of Economics - ✔✔A social science concerned chiefly with description and
analysis of the production and consumption of goods and services
Definition of Scarcity - ✔✔Not abundant or plentiful
4 types of economic resources - ✔✔Land, Labor, Capital, Entrepreneurship
Definition of Opportunity Cost - ✔✔The value of what is sacrificed to get something
else
Explicit cost - ✔✔a direct payment made to others in the course of running a business,
such as wage, rent and materials
Implicit Cost - ✔✔the opportunity cost that a business takes to run the business
Specialization - ✔✔When a business or person does one thing really well
exchange - ✔✔the trading of goods or services between two parties
Comparative advantage - ✔✔When a company produces a good in a better way than
when compared to other goods
EMILY CHARLENE © 2025, ALL RIGHTS RESERVED 1
, Absolute advantage - ✔✔When a business produces a good at the lowest cost
What questions does an economy answer - ✔✔What to produce
How much to produce
for whom to produce
how will it deal with change
how will progress be promoted
Traditional economy - ✔✔an economy based off culture or tradition
Market economy - ✔✔An economic system based on private property rights and self
interest in which individuals decide how,for whom and what to produce
Command economy - ✔✔an economic system based on individuals goodwill towards
others and in which society decides how, for whom, and what to produce
definition of a market - ✔✔A regular gathering of people for the purchase and sale of
provisions, livestock, and other commodities.
Law of Demand - ✔✔As Price goes up, Demand goes down
law of supply - ✔✔price and quantity behave in the same way (as p goes up, Qd goes
up)
inferior good - ✔✔as your income goes up, you buy less of the good.
EMILY CHARLENE © 2025, ALL RIGHTS RESERVED 2
Questions and Answers 100% Pass
Definition of Economics - ✔✔A social science concerned chiefly with description and
analysis of the production and consumption of goods and services
Definition of Scarcity - ✔✔Not abundant or plentiful
4 types of economic resources - ✔✔Land, Labor, Capital, Entrepreneurship
Definition of Opportunity Cost - ✔✔The value of what is sacrificed to get something
else
Explicit cost - ✔✔a direct payment made to others in the course of running a business,
such as wage, rent and materials
Implicit Cost - ✔✔the opportunity cost that a business takes to run the business
Specialization - ✔✔When a business or person does one thing really well
exchange - ✔✔the trading of goods or services between two parties
Comparative advantage - ✔✔When a company produces a good in a better way than
when compared to other goods
EMILY CHARLENE © 2025, ALL RIGHTS RESERVED 1
, Absolute advantage - ✔✔When a business produces a good at the lowest cost
What questions does an economy answer - ✔✔What to produce
How much to produce
for whom to produce
how will it deal with change
how will progress be promoted
Traditional economy - ✔✔an economy based off culture or tradition
Market economy - ✔✔An economic system based on private property rights and self
interest in which individuals decide how,for whom and what to produce
Command economy - ✔✔an economic system based on individuals goodwill towards
others and in which society decides how, for whom, and what to produce
definition of a market - ✔✔A regular gathering of people for the purchase and sale of
provisions, livestock, and other commodities.
Law of Demand - ✔✔As Price goes up, Demand goes down
law of supply - ✔✔price and quantity behave in the same way (as p goes up, Qd goes
up)
inferior good - ✔✔as your income goes up, you buy less of the good.
EMILY CHARLENE © 2025, ALL RIGHTS RESERVED 2
