ECN 211 Final Exam 113 Questions with Correct Answers 100% Verified scarcity - Correct Answer the limited nature of society's resources Opportunity cost - Correct Answer Whatever must be given up to obtain some item principles of specialization and exchange - Correct Answer trade can benefit everyone in society because it allows people to specialize in activities in which they have comparative advantage Absolute advantage - Correct Answer The ability to produce a good using fewer inputs than another producer Comparative advantage - Correct Answer The ability to produce a good at a lower opportunity cost than another producer Law of demand - Correct Answer the claim that, other things being equal, the quantity demanded of a good falls when the price of the good rises Law of supply - Correct Answer the claim that other things being equal, the quantity supplied of a good rises when the price of the good rises Market equilibrium - Correct Answer A situation in which the market price has reached the level at which quantity supplied equals quantity demanded Factors that shift the demand curve - Correct Answer Income, wealth, prices of related goods, population, expected price, taste Factors that shift the supply curve - Correct Answer input prices, price of alternatives, technology, number of firms, expectations, changes in weather, or other natural events 1 / 2
GDP - Correct Answer the market value of all final goods and services purchased within a country in a given period of time real vs nominal GDP - Correct Answer real is valued at constant prices while nominal is valued at current prices unemployment - Correct Answer those who were not employed, were available for work, and had tried to find employment during the previous four weeks discouraged workers - Correct Answer individuals who would like to work but have given up looking for a job consumer price index (CPI) - Correct Answer an index of the cost, through time of a market basket of good purchased by a typical household Calculating the inflation rate - Correct Answer amount in today's dollars = amount in year t dollars * price level today/price level in year t Real wages - Correct Answer purchasing power of your wage adjusted for inflation: nominal wage in the year/CPI in that year * 100 nominal wages - Correct Answer number of dollars you earn not adjusted for inflation nominal interest rate - Correct Answer interest rate not corrected for inflation real interest rate - Correct Answer corrected for inflation: nominal interest rate - rate of inflation inflation and purchasing power - Correct Answer inflation, an increase in the price level, decreases the purchasing power of money
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