ECON 1500 Exam 1 with correct detailed answers.

ECON 1500 Exam 1 with correct detailed
| | | | | | |




answers

What |is |Economics? |- |VERIFIED |ANSWER✔✔-The |study |of |people |and |the |choices |they |make |in |a |
world |of |scarcity.



4 |Themes |of |Economics |- |VERIFIED |ANSWER✔✔--Definition |of |Economics

-Definition |of |supply

- |Definition |of |Demand

-Mutually |Beneficial |Voluntary |Exchange |(if |the |trade |is |voluntary |both |parties |benefit.)



Scarcity: |- |VERIFIED |ANSWER✔✔-Anything |that |has |a |positive |price |is |scarce. |

-A |thing |that |is |add |to |be |"scarce" |if, |at |a |zero |price



4 |Basic |groups |of |Resources |- |VERIFIED |ANSWER✔✔-1. |Land

2. |Labor

3. |Capital

4. |Entrepreneurial |Abilities



Land |Resource |- |VERIFIED |ANSWER✔✔-all |natural |resources, |or |gifts |of |nature



Labor |Resource |- |VERIFIED |ANSWER✔✔-The |physical |and |mental |effort |of |workers



Capital |Resource |- |VERIFIED |ANSWER✔✔-man |made |resources |used |in |producing |things.

-Physical |Capital: |" |" |

-Human |Capital: |The |know-How: |school |to |make |yourself |more |marketable |(knowledge)

, Entrepreneurial |Abilities |- |VERIFIED |ANSWER✔✔--The |human |resource |that |organizes |labor, |land, |and
|capital



- |Take |more |risks

- |Notice |a |need |that |is |not |being |met

-License: |research |( |word |of |mouth); |main |employers/ |creator |of |jobs; |open |for |progress; |see |them |as
|heroes.




Scarce |Resources |Questions |- |VERIFIED |ANSWER✔✔-1. |What |is |to |be |produced? |what |the |consumer |
wants

2. |how |will |it |be |produced? |The |way |it |has |more |net |gain |than |the |consumer

3. |When |will |it |be |produced? |ex. |Christmas |Trees |not |in |July

4. |Who |is |going |to |get |it? |The |value |determined |by |taste |and |preferences.



Methods |- |VERIFIED |ANSWER✔✔-1. |The |market |mechanism |

2. |Government |Dictates: |what, |when, |and |for |whom

3. |Violence: |let |people |get |weapons |and |physically |fight |it |out

-Equally |and |Efficiency |

-Competition |and |Value



Rational |Self |Interest |- |VERIFIED |ANSWER✔✔-People |will |make |the |choices |that, |at |the |time |and |with
|the |information |they |have |at |their |disposal, |will |give |them |the |greatest |amount |of |satisfaction |for |

the |effort |or |money |they |spend. |

-Mutually |Beneficial |Voluntary |Exchange



Common |Mistakes |in |Economic |Analysis |- |VERIFIED |ANSWER✔✔-1. |The |fallacy |that |association |is |
causation |

2. |The |fallacy |of |composition

3. |The |mistake |of |ignoring |secondary |effects

4. |Violation |of |the |Ceteris |Paribus |(All |else |constant) |condition