What Are the Key Concepts You Should Know?
What is it? When does it exist? What are the consequences? What are some examples of people
forgetting about scarcity when making decision or statements?
2. People respond to observable costs and be
MACRO Exam II TCU Spring 2015
Identify the choice that best completes the statement or answers the question.
1. For an economy as a whole, income must equal expenditure because
a. the number of firms is equal to the number of households
RESOURCE MARKETS (Note: Factor = Factor of Production = Resource.) Factors of production include Land, Labor, Capital, and Entrepreneurship, the basic resources out of which all products are created. In resource markets, the firm is the Demander, hou
ELASTICITY Economists use the term elasticity to refer to market reaction to a change. At the principles level, texts will speak of price elasticity of Demand and Supply, of income elasticity of Demand, and of cross-price elasticity of Demand. In eac
THE ESSENCE OF ECONOMICS The essence of economics is scarcity. The source of scarcity is the limited quantity of resources available with which to produce the goods and services desired. Economists reduce resources to 3 or 4 broad categories: Land =
Problem set #6
(due on Thursday, November 30, in class)
1. Suppose you are given an economy where only bread is produced and consumed. Suppose further that a loaf of bread costs $2, and since only bread is produced the price level in the economy is