Essential Foundations of Economics - Exam 1 Study Questions

which method is used to allocate the following scarce resources? a. campus parking space between student areas and faculty areas b. a spot in a restricted student parking area c. text books d. host city of the olympic games

a. first come first serve b. personal characteristic - professors c. market price d. contest

define elastic, inelastic, and unit elastic.

elastic - if the percentage change in the quantity demanded exceeds the percentage change in price (more than 1) inelastic - if the percentage change in the quantity demanded is less than the percentage change in price (less than 1) unit elastic - if the percentage change in the quantity demanded equals the percentage change in price (equal or close to 0)

define micro and macro economics and give an example of each.

micro economics - the study of choices individuals and business make. example: small businesses having to find a way to draw customers in when a road is blocked to the store. marco economics - total effects on the global economy. example: tariffs

define normative and positive and give an example of each. how can these classifications be helpful when evaluating news?

normative - a statement that can't be settled by facts. "Is there a God?" positive - a statement that can be settled by facts. "Is an apple red?" this helps to determine if a news source is credible or full of opinion.

what are the two rules outlined as a basis for evaluating fairness in markets?

rules being fair on how we allocate and outcome or results fair.

define scarcity and explain why it is important to economics.

scarcity is when there isn't enough goods and services to go around. economics concerns supply and demand which is directly impacted by scarcity.

if demand is elastic and a supplier increase the prices, what happens to total revenue?

total revenue decreases.

if demand is inelastic and a supplier increases the price, what happens to total revenue?

total revenue increases.