ECO 1104 Midterm 1 Exam | Questions and Answers with Verified Solutions |
Latest 2026 Update
Q: Economics
Answer:
The study of how people manage their resoruces
Q: Microeconomics
Answer:
How individuals and firms manage their resources
Q: Macroeconomics
Answer:
Study of economy on regional, national or international scale
Q: Rational behavior
Answer:
people make choices to achieve their goals in the most effective way possible
Q: Scarcity
Answer:
-limited
-wanting more than we can get with available resources
-can't have everything
Q: Wants
Answer:
unlimited
Q: Constraints
Answer:
limited (b/c of available resources)
,Q: Opportunity cost
Answer:
-what you give up to do something
-value of next best alternative
-trade off's
Q: Marginal decision making
Answer:
describes the idea that rational people compare the additional benefits of a
choice against the additional costs, without considering related benefits and costs of past
choices
Q: sunk costs
Answer:
costs that have already been incurred and cannot be recovered
Q: Incentives
Answer:
-something that causes people to behave in a certain way by changing the trade-offs they
face
-positive, makes people more likely to do something
-negative, makes people less likely to do something
Q: Efficiency
Answer:
-a situtation in which resources are used in the most productive way possible to produce the
goods and services that have the greatest total economic value to society
Q: Why isn't everyone already doing it?
Answer:
-innovation
-market failure
-intervention
-goals other than profit
, Q: Innovation
Answer:
-idea hasn't been used yet because it's new, no ones thought of it
Q: Market Failure
Answer:
idea won't work because it's too easy to copy or other companies already own a lot of
that market
Q: Interventions
Answer:
powerful force (government) intervenes with economy
Q: Goals other than profit
Answer:
doesn't provide profit, no one will take advantage
Q: Correlation
Answer:
a consistent relationship between two variables
Q: postive correlation
Answer:
a relationship between two variables in which both variables either increase or
decrease together
Q: negative correlation
Answer:
as one variable increases, the other decreases
Q: Uncorrelated
Answer:
no consistent relationship between the two variables
Latest 2026 Update
Q: Economics
Answer:
The study of how people manage their resoruces
Q: Microeconomics
Answer:
How individuals and firms manage their resources
Q: Macroeconomics
Answer:
Study of economy on regional, national or international scale
Q: Rational behavior
Answer:
people make choices to achieve their goals in the most effective way possible
Q: Scarcity
Answer:
-limited
-wanting more than we can get with available resources
-can't have everything
Q: Wants
Answer:
unlimited
Q: Constraints
Answer:
limited (b/c of available resources)
,Q: Opportunity cost
Answer:
-what you give up to do something
-value of next best alternative
-trade off's
Q: Marginal decision making
Answer:
describes the idea that rational people compare the additional benefits of a
choice against the additional costs, without considering related benefits and costs of past
choices
Q: sunk costs
Answer:
costs that have already been incurred and cannot be recovered
Q: Incentives
Answer:
-something that causes people to behave in a certain way by changing the trade-offs they
face
-positive, makes people more likely to do something
-negative, makes people less likely to do something
Q: Efficiency
Answer:
-a situtation in which resources are used in the most productive way possible to produce the
goods and services that have the greatest total economic value to society
Q: Why isn't everyone already doing it?
Answer:
-innovation
-market failure
-intervention
-goals other than profit
, Q: Innovation
Answer:
-idea hasn't been used yet because it's new, no ones thought of it
Q: Market Failure
Answer:
idea won't work because it's too easy to copy or other companies already own a lot of
that market
Q: Interventions
Answer:
powerful force (government) intervenes with economy
Q: Goals other than profit
Answer:
doesn't provide profit, no one will take advantage
Q: Correlation
Answer:
a consistent relationship between two variables
Q: postive correlation
Answer:
a relationship between two variables in which both variables either increase or
decrease together
Q: negative correlation
Answer:
as one variable increases, the other decreases
Q: Uncorrelated
Answer:
no consistent relationship between the two variables
