ECONOMICS 101 COMPLETE
QUESTIONS AND ANSWERS
Economics - CORRECT ANSWER-The study of how society
manages its scarce resources
Scarcity - CORRECT ANSWER-The limited nature of society's
resources
Efficiency - CORRECT ANSWER-The property of society
getting the most it can from its scarce re...
Economics - CORRECT ANSWER-The study of how society
manages its scarce resources
Scarcity - CORRECT ANSWER-The limited nature of society's
resources
Efficiency - CORRECT ANSWER-The property of society
getting the most it can from its scarce resources
Equality - CORRECT ANSWER-The property of distributing
economic prosperity uniformly among the members of society
Opportunity Cost - CORRECT ANSWER-Whatever must be
given up to obtain some item; measures trade-offs
Incentive - CORRECT ANSWER-Something that induces a
person to act
Market Economy - CORRECT ANSWER-An Economy that
allocates resources through the decentralized decisions of
many firms and households as they interact in markets for
goods and services
, Property Rights - CORRECT ANSWER-The ability of an
individual to own and exercise control over scarce resources
Market Failure - CORRECT ANSWER-A situation in which a
market left on its own fails to allocate resources efficiently
Externality - CORRECT ANSWER-The impact of one person's
actions on the well-being of a bystander
Market Power - CORRECT ANSWER-The ability of a single
economic actor (or small group of actors) to have a substantial
influence on market prices
Scientific Method - CORRECT ANSWER-The dispassionate
development and testing of theories about how the world works
Circular-flow diagram - CORRECT ANSWER-A visual model of
the economy that shows how dollars flow through markets
among households and firms
Production Possibilities Frontier - CORRECT ANSWER-A
graph that shows the combinations of output that the economy
can possibly produce given the available factors of production
and the available production technology
Positive Statements - CORRECT ANSWER-Claims that
attempt to describe the world as it is
Normative Statements - CORRECT ANSWER-Claims that
attempt to prescribe how the world should be
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
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