PSU Econ 102 Exam 1 Questions and Correct Answers the Latest Update and Recommended Version
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Course
PSU Econ 102
Institution
PSU Econ 102
Economics
→ Study of the choices people make to attain their goals, given their scarce resources
Macroeconomics
→ Study of the economy as a whole
→ Ex: Economic growth, unemployment, inflation
Microeconomics
→ Study of decision making by individuals and firms, along with how the gover...
PSU Econ 102 Exam 1 Questions and
Correct Answers the Latest Update and
Recommended Version
Economics
→ Study of the choices people make to attain their goals, given their scarce resources
Macroeconomics
→ Study of the economy as a whole
→ Ex: Economic growth, unemployment, inflation
Microeconomics
→ Study of decision making by individuals and firms, along with how the government
influences those decisions
Rational Individuals
→ Weigh all the benefits and costs of each action
→ (Assumption that consumers and firms use all available information as they act to
achieve their goals)
Incentive
→ Factor that motivates a person to act or exert effort
→ Requires decision makers to evaluate whether the benefit of one more unit of
something is greater than its cost
Margin
→ Extra/additional
Trade-offs
→ Occur because time and resource are scarce
Opportunity Cost
→ Highest valued alternative that must be sacrificed in order to get something
Trade
→ Voluntary exchange of goods and services between two or more parties (makes all
parties better off)
→ -Specialization is key
Positive Analysis
→ Concerned with WHAT IS
→ Ex: unemployment rate IS 6.7%
Normative Analysis
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