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ECON 213 - Exam 1 Questions And Answers Latest Updated
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ECON 213 - Exam 1 Questions And Answers Latest Updated
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ECON 213 - Exam 1 Questions AndAnswers Latest Updated
scarcity ANS✔✔ refers to the limited nature of society's resources, given society's unlimited wants and
neeeds
economics ANS✔✔ the study of how people allocate their limited resources to satisfy their nearly
unlimited wants
microeconomics ANS✔✔ the study of the individual units that make up the economy
macroeconomics ANS✔✔ the study of the overall aspects and workings of an economy
Five Foundations of Economics ANS✔✔ 1. Incentives
2. Trade-offs
3. Opportunity Cost
4. Marginal Thinking
5. Principle that Trade Creates Value
incentives ANS✔✔ factors that motivate a person to act or exert effort
opportunity cost ANS✔✔ the highest-valued alternative that must be sacrificed in order to get
something else
2024
, economic thinking ANS✔✔ requires a purposeful evaluation of the available opportunities to make the
best decision possible
marginal thinking ANS✔✔ requires decision-makers to evaluate whether the benefit of one more unit of
something is greater than its cost
markets ANS✔✔ bring buyers and sellers together to exchange goods and services
trade ANS✔✔ the voluntary exchange of goods and services between two or more parties
comparative advantage ANS✔✔ refers to the situation where an individual, business, or country can
produce at a lower opportunity cost than a competitor can
positive statement ANS✔✔ can be tested and validated; describes "what is"
normative statement ANS✔✔ an opinion that cannot be tested or validated; describes "what ought to
be"
ceteris paribus ANS✔✔ concept under which economists examine a change in one variable while
holding everything else constant
endogenous factors ANS✔✔ the variables that can be controlled for in a model
exogenous factors ANS✔✔ the variables that cannot be controlled for in a model
production possibilites frontier (ppf) ANS✔✔ model that illustrates the combinations of outputs that a
society can produce if all of its resources are being used efficiently
2024
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