ECON 160 MIDTERM 1 EXAM | QUESTIONS AND
SOLUTIONS | WINTER 2026 | WITH COMPLETE
SOLUTIONS - UCLA.
EXAM INSTRUCTIONS
Total Questions: 50 multiple-choice questions
Time Allotted: 75 minutes
Materials Allowed: One 8.5" × 11" handwritten cheat sheet (both sides),
non-programmable calculator
Scoring: Each question is worth 2 points (100 points total)
Instructions: Select the single best answer for each question. Show your
work on the exam booklet for partial credit consideration. Exams are
multiple-choice with no partial credit for incorrect selections .
, The fundamental economic problem that arises because society cannot
produce all the goods and services people wish to have is called:
A) Opportunity cost
B) Scarcity
C) Marginal analysis
D) Inflation
Answer: B) Scarcity
Rationale: Scarcity exists when society has limited resources and cannot
produce all the goods and services people desire. This is the foundational
concept that drives the study of economics .
The value of the next best alternative that must be given up when
making a choice is the:
A) Sunk cost
B) Marginal cost
C) Opportunity cost
,
D) Total cost
Answer: C) Opportunity cost
Rationale: Opportunity cost represents whatever must be given up to
obtain some item. It is the value of the next best alternative foregone .
When a society cannot produce more of one good without producing
less of another good, it is operating:
A) Inefficiently
B) Efficiently
C) At a point outside its production possibilities frontier
D) Below its production possibilities frontier
Answer: B) Efficiently
Rationale: An economy is producing efficiently when there is no way to
produce more of one good without producing less of another good—this
means it is operating on its production possibilities frontier .
A statement describing how the world is, rather than how it should be, is
a:
A) Normative statement
,
B) Positive statement
C) Value judgment
D) Prescriptive statement
Answer: B) Positive statement
Rationale: Positive statements describe how the world is and can be
tested or verified. Normative statements describe how the world should
be and involve value judgments .
A small incremental adjustment to a plan of action is called a:
A) Marginal change
B) Structural change
C) Parametric shift
D) Discrete change
Answer: A) Marginal change
Rationale: Marginal changes are small, incremental adjustments to an
SOLUTIONS | WINTER 2026 | WITH COMPLETE
SOLUTIONS - UCLA.
EXAM INSTRUCTIONS
Total Questions: 50 multiple-choice questions
Time Allotted: 75 minutes
Materials Allowed: One 8.5" × 11" handwritten cheat sheet (both sides),
non-programmable calculator
Scoring: Each question is worth 2 points (100 points total)
Instructions: Select the single best answer for each question. Show your
work on the exam booklet for partial credit consideration. Exams are
multiple-choice with no partial credit for incorrect selections .
, The fundamental economic problem that arises because society cannot
produce all the goods and services people wish to have is called:
A) Opportunity cost
B) Scarcity
C) Marginal analysis
D) Inflation
Answer: B) Scarcity
Rationale: Scarcity exists when society has limited resources and cannot
produce all the goods and services people desire. This is the foundational
concept that drives the study of economics .
The value of the next best alternative that must be given up when
making a choice is the:
A) Sunk cost
B) Marginal cost
C) Opportunity cost
,
D) Total cost
Answer: C) Opportunity cost
Rationale: Opportunity cost represents whatever must be given up to
obtain some item. It is the value of the next best alternative foregone .
When a society cannot produce more of one good without producing
less of another good, it is operating:
A) Inefficiently
B) Efficiently
C) At a point outside its production possibilities frontier
D) Below its production possibilities frontier
Answer: B) Efficiently
Rationale: An economy is producing efficiently when there is no way to
produce more of one good without producing less of another good—this
means it is operating on its production possibilities frontier .
A statement describing how the world is, rather than how it should be, is
a:
A) Normative statement
,
B) Positive statement
C) Value judgment
D) Prescriptive statement
Answer: B) Positive statement
Rationale: Positive statements describe how the world is and can be
tested or verified. Normative statements describe how the world should
be and involve value judgments .
A small incremental adjustment to a plan of action is called a:
A) Marginal change
B) Structural change
C) Parametric shift
D) Discrete change
Answer: A) Marginal change
Rationale: Marginal changes are small, incremental adjustments to an
