ECON 2150 Midterm Review With 100% Correct Answers
Economics
The study of decision making
Microeconomics
individual decisions
Macroeconomics
How individual decisions affect the economy as a whole
Scarcity
Unlimited wants with limited resources
Opportunity Cost
What is lost from making a decision
Economies of Scale
The average cost of production decreases when the output increases
Traditional Economy
economic system that relies on habit, custom, or ritual to decide questions of
production and consumption of goods and services
Command Economy
An economic system in which the government controls a country's economy.
, Market Economy
Economic decisions are made by individuals or the open market.
Mixed Market
The system that the United States has where the government has some control over
economic decisions.
Positive Statement
a fact
Normative Statement
an opinion
Ceterus Paribus
means, "other things equal" changes are isolated to observe how they affect the
economy
Demand Curve Shifters
income, population, substitutes, compliments
Supply Curve Shifters
technology, government policy, natural conditions
Law of Supply
Price and quantity have a positive relationship. If price increases, quantity increases. If
price decreases, quantity decreases.
Economics
The study of decision making
Microeconomics
individual decisions
Macroeconomics
How individual decisions affect the economy as a whole
Scarcity
Unlimited wants with limited resources
Opportunity Cost
What is lost from making a decision
Economies of Scale
The average cost of production decreases when the output increases
Traditional Economy
economic system that relies on habit, custom, or ritual to decide questions of
production and consumption of goods and services
Command Economy
An economic system in which the government controls a country's economy.
, Market Economy
Economic decisions are made by individuals or the open market.
Mixed Market
The system that the United States has where the government has some control over
economic decisions.
Positive Statement
a fact
Normative Statement
an opinion
Ceterus Paribus
means, "other things equal" changes are isolated to observe how they affect the
economy
Demand Curve Shifters
income, population, substitutes, compliments
Supply Curve Shifters
technology, government policy, natural conditions
Law of Supply
Price and quantity have a positive relationship. If price increases, quantity increases. If
price decreases, quantity decreases.
