ECO 201 Final Exam Questions and
Answers 100% Pass
What is economics? - ✔✔The social science that studies production, distribution, and
consumption of goods and serves // the study of the allocation of limited resources
across unlimited wants
What does an economist examine? - ✔✔who gets what, how, why, and when
Land - ✔✔Inputs that exist in the world around us, sometimes called natural resources
ex. water, air, plants, dirt
Labor - ✔✔Human input, sometimes called human capital.
ex. blue collar workers, white collar workers
Capital - ✔✔Human-made inputs, stuff that makes stuff.
ex. machines, roads, tractors
Money - ✔✔nonproductive capital. Represents a firms ability to purchase capital
Entrepreneurship - ✔✔Bringing together land, labor, and capital to create a good
EMILY CHARLENE © 2025, ALL RIGHTS RESERVED 1
,Technology - ✔✔not listed as an input, it is the recipe by which we bring together land,
labor, and capital
Positive Economics - ✔✔What does the world look like and how are things allocated.
generally made up of statements or facts.
Normative Economics - ✔✔How should the world work and how should things be
allocated. generally normative statements are value laden statements
Microeconomics - ✔✔understanding how we allocate particular goods and resources .
labor markets
ex. Buying apples vs. buying cars
Macroeconomics - ✔✔How nations make trade-offs in times of aggregate spending and
production, and in public policy, and the consequences of these trade offs
ex. labor markets, GDP
resource payment - ✔✔Land // Rent
Labor // Wage
Capital // Interest
Entrepreneurship // Profit
What is Value? - ✔✔What are we willing to give up to get something we want
value does not equal price
EMILY CHARLENE © 2025, ALL RIGHTS RESERVED 2
, Opportunity Price - ✔✔The thing or activity we give up to get what we want or do
what we do. The MOST valuable thing we give up
Sacristy Principle - ✔✔The opportunity cost of spending more times on any activity is
having less time avialable to spend on others
Absolute Advantage - ✔✔When one person (firm or country) can produce a good with
less time or resources
Comparative Advantage - ✔✔When one person (firm or country) is she/he/they can
produce a good at a lower opportunity cost than another
Law of Demand - ✔✔The (usually) inverse relationship between price and quantity
Demand Schedule - ✔✔A tabular listing of price and quantity
Demand Course - ✔✔Graphed representation of demand, downward slope says the
lower the price the more we want
Change in Quantity Demanded - ✔✔moving along the demand curve, price change
causes a change in the number of units we buy
Change in Demand - ✔✔Shift the demand curve, change in # of units NOT price
Determinate of demand - ✔✔1) Tastes and Preferences
2) Change in income
3)Price of related goods
EMILY CHARLENE © 2025, ALL RIGHTS RESERVED 3
Answers 100% Pass
What is economics? - ✔✔The social science that studies production, distribution, and
consumption of goods and serves // the study of the allocation of limited resources
across unlimited wants
What does an economist examine? - ✔✔who gets what, how, why, and when
Land - ✔✔Inputs that exist in the world around us, sometimes called natural resources
ex. water, air, plants, dirt
Labor - ✔✔Human input, sometimes called human capital.
ex. blue collar workers, white collar workers
Capital - ✔✔Human-made inputs, stuff that makes stuff.
ex. machines, roads, tractors
Money - ✔✔nonproductive capital. Represents a firms ability to purchase capital
Entrepreneurship - ✔✔Bringing together land, labor, and capital to create a good
EMILY CHARLENE © 2025, ALL RIGHTS RESERVED 1
,Technology - ✔✔not listed as an input, it is the recipe by which we bring together land,
labor, and capital
Positive Economics - ✔✔What does the world look like and how are things allocated.
generally made up of statements or facts.
Normative Economics - ✔✔How should the world work and how should things be
allocated. generally normative statements are value laden statements
Microeconomics - ✔✔understanding how we allocate particular goods and resources .
labor markets
ex. Buying apples vs. buying cars
Macroeconomics - ✔✔How nations make trade-offs in times of aggregate spending and
production, and in public policy, and the consequences of these trade offs
ex. labor markets, GDP
resource payment - ✔✔Land // Rent
Labor // Wage
Capital // Interest
Entrepreneurship // Profit
What is Value? - ✔✔What are we willing to give up to get something we want
value does not equal price
EMILY CHARLENE © 2025, ALL RIGHTS RESERVED 2
, Opportunity Price - ✔✔The thing or activity we give up to get what we want or do
what we do. The MOST valuable thing we give up
Sacristy Principle - ✔✔The opportunity cost of spending more times on any activity is
having less time avialable to spend on others
Absolute Advantage - ✔✔When one person (firm or country) can produce a good with
less time or resources
Comparative Advantage - ✔✔When one person (firm or country) is she/he/they can
produce a good at a lower opportunity cost than another
Law of Demand - ✔✔The (usually) inverse relationship between price and quantity
Demand Schedule - ✔✔A tabular listing of price and quantity
Demand Course - ✔✔Graphed representation of demand, downward slope says the
lower the price the more we want
Change in Quantity Demanded - ✔✔moving along the demand curve, price change
causes a change in the number of units we buy
Change in Demand - ✔✔Shift the demand curve, change in # of units NOT price
Determinate of demand - ✔✔1) Tastes and Preferences
2) Change in income
3)Price of related goods
EMILY CHARLENE © 2025, ALL RIGHTS RESERVED 3
