ECN Exam 1 Study Guide 2026 | Economics Review, Practice Questions & Test
Prep
What are the two essential ingredients of an economic topic? - correct answer ✔✔scarcity and
choice
the highest valued alternative that must be sacrificed as a result of making a choice - correct
answer ✔✔opportunity cost
gaining a specific benefit at the least possible cost - correct answer ✔✔economizing
the cost added by producing one additional unit of a product or service - correct answer
✔✔marginal cost
the additional benefit arising from a unit increase in a particular activity - correct answer
✔✔marginal benefit
the scientific study of "what is" among economic relationships
Ex: the inflation rate rises when the money supply is increased - correct answer ✔✔positive
economics
judgements about "what ought to be" in economic matters
Ex: the inflation rate should be lower - correct answer ✔✔normative economics
when desire for a good or service far outstrips their availability from nature - correct answer
✔✔scarcity
, we may someday eliminate _____, but ____ will always be with us - correct answer ✔✔poverty,
scarcity
if an option becomes more costly, an individual will be LESS or MORE likely to choose it? -
correct answer ✔✔less
the "foundation of trade" - correct answer ✔✔mutual gain
the right to use, control, and obtain benefits from a resource, good, or service - correct answer
✔✔property rights
_____ involve the right to exclusive use, legal protection against invaders, and the right to
transfer to another - correct answer ✔✔private property rights
this breaks down the production of a good into a series of tasks performed by different workers
- correct answer ✔✔division of labor
when workers become more skilled at their specific job in time - correct answer
✔✔specialization
the proposition that the joint output of trading partners will be greatest when each good is
produced by the low opportunity cost producer - correct answer ✔✔the law of comparative
advantage
when large scale production leads to lower per unit costs - correct answer ✔✔mass production
methods
Prep
What are the two essential ingredients of an economic topic? - correct answer ✔✔scarcity and
choice
the highest valued alternative that must be sacrificed as a result of making a choice - correct
answer ✔✔opportunity cost
gaining a specific benefit at the least possible cost - correct answer ✔✔economizing
the cost added by producing one additional unit of a product or service - correct answer
✔✔marginal cost
the additional benefit arising from a unit increase in a particular activity - correct answer
✔✔marginal benefit
the scientific study of "what is" among economic relationships
Ex: the inflation rate rises when the money supply is increased - correct answer ✔✔positive
economics
judgements about "what ought to be" in economic matters
Ex: the inflation rate should be lower - correct answer ✔✔normative economics
when desire for a good or service far outstrips their availability from nature - correct answer
✔✔scarcity
, we may someday eliminate _____, but ____ will always be with us - correct answer ✔✔poverty,
scarcity
if an option becomes more costly, an individual will be LESS or MORE likely to choose it? -
correct answer ✔✔less
the "foundation of trade" - correct answer ✔✔mutual gain
the right to use, control, and obtain benefits from a resource, good, or service - correct answer
✔✔property rights
_____ involve the right to exclusive use, legal protection against invaders, and the right to
transfer to another - correct answer ✔✔private property rights
this breaks down the production of a good into a series of tasks performed by different workers
- correct answer ✔✔division of labor
when workers become more skilled at their specific job in time - correct answer
✔✔specialization
the proposition that the joint output of trading partners will be greatest when each good is
produced by the low opportunity cost producer - correct answer ✔✔the law of comparative
advantage
when large scale production leads to lower per unit costs - correct answer ✔✔mass production
methods
