ECN 211 ASU UPDATED FINAL EXAMS QUESTIONS
AND ANSWERS SURE A+
✔✔Rationality Assumption - ✔✔The assumption that individuals will not intentionally
make
decisions that would leave them worse off
✔✔Models - ✔✔Simplified representations of the real world; developed and used as
aids in
understanding, explaining, and predicting economic phenomena in the real world
✔✔Ceteris Paribus Assumption - ✔✔The assumption that nothing changes except the
factors that
are studied. It is used to isolate the effect of a change in one variable on another one by
assuming that all other variables do not change.
✔✔Bounded Rationality - ✔✔A hypothesis that people are nearly, but not fully, rational
✔✔Positive - ✔✔Purely descriptive statements or scientific predictions such as If A,
then B; a
statement of what is
✔✔Normative - ✔✔- An analysis that involves value judgments; relates to whether
things are good
, or bad; a statement of what ought to be
✔✔Direct Relationship - ✔✔-A relationship between two variables that is positive, which
means that
an increase in one variable is associated with an increase in the other, and a decrease
in
one variable is associated with a decrease in the other
✔✔Inverse Relationship - ✔✔A relationship between two variables that is negative,
which means
that an increase in one variable is associated with a decrease in the other
✔✔Chapter 2: Scarcity - ✔✔- Occurs when the materials for producing things that
people desire are
insufficient to satisfy all wants
✔✔Production: - ✔✔- Any activity that results in the conversion of resources into
products that can
be used in consumption
✔✔Land - ✔✔-Natural resources or the gifts of nature
✔✔Labor - ✔✔- The human resource
✔✔Physical Calpital - ✔✔All manufactured resources
✔✔Human Capital - ✔✔Accumulated training and education of workers
✔✔Entrepreanurship - ✔✔The person who organizes, manages, and assembles the
other
resources; also, the risk taker of the organization
✔✔Goods: - ✔✔Things from which individuals derive satisfaction or happiness.
✔✔Economic Goods: - ✔✔- Scarce goods for which the quantity demanded exceeds
the quantity
supplied at zero price
✔✔Services - ✔✔Tasks that are performed for someone else; also called intangible
goods
✔✔Opportunity Costs - ✔✔The highest-valued, next-best alternative that must be
sacrificed to
obtain something or to satisfy a want
AND ANSWERS SURE A+
✔✔Rationality Assumption - ✔✔The assumption that individuals will not intentionally
make
decisions that would leave them worse off
✔✔Models - ✔✔Simplified representations of the real world; developed and used as
aids in
understanding, explaining, and predicting economic phenomena in the real world
✔✔Ceteris Paribus Assumption - ✔✔The assumption that nothing changes except the
factors that
are studied. It is used to isolate the effect of a change in one variable on another one by
assuming that all other variables do not change.
✔✔Bounded Rationality - ✔✔A hypothesis that people are nearly, but not fully, rational
✔✔Positive - ✔✔Purely descriptive statements or scientific predictions such as If A,
then B; a
statement of what is
✔✔Normative - ✔✔- An analysis that involves value judgments; relates to whether
things are good
, or bad; a statement of what ought to be
✔✔Direct Relationship - ✔✔-A relationship between two variables that is positive, which
means that
an increase in one variable is associated with an increase in the other, and a decrease
in
one variable is associated with a decrease in the other
✔✔Inverse Relationship - ✔✔A relationship between two variables that is negative,
which means
that an increase in one variable is associated with a decrease in the other
✔✔Chapter 2: Scarcity - ✔✔- Occurs when the materials for producing things that
people desire are
insufficient to satisfy all wants
✔✔Production: - ✔✔- Any activity that results in the conversion of resources into
products that can
be used in consumption
✔✔Land - ✔✔-Natural resources or the gifts of nature
✔✔Labor - ✔✔- The human resource
✔✔Physical Calpital - ✔✔All manufactured resources
✔✔Human Capital - ✔✔Accumulated training and education of workers
✔✔Entrepreanurship - ✔✔The person who organizes, manages, and assembles the
other
resources; also, the risk taker of the organization
✔✔Goods: - ✔✔Things from which individuals derive satisfaction or happiness.
✔✔Economic Goods: - ✔✔- Scarce goods for which the quantity demanded exceeds
the quantity
supplied at zero price
✔✔Services - ✔✔Tasks that are performed for someone else; also called intangible
goods
✔✔Opportunity Costs - ✔✔The highest-valued, next-best alternative that must be
sacrificed to
obtain something or to satisfy a want
