MICROECONOMICS PRINCIPLES FOR A
CHANGING WORLD COMPREHENSIVE
EXAMINATION TEST COMPLETE
QUESTIONS AND CORRECT ANSWERS
●● Scarcity can best be defined as a situation in which
Answer: the resources we use to produce goods and services are limited
●● Normative economics
Answer: answers the question "What ought to be?"
●● The 3 key economic questions are:
Answer: What products do we produce?
How do we produce the products?
What consumes the products?
●● Economic models are used to
Answer: explore decision making by individuals, firms and other
organizations.
●● Would an economist consider clean air a scarce resource?
, Answer: Yes because clean air is often limited because pollution reduces
it availability.
●● The Latin phrase ceteris paribus means that when a relationship
between two variables is being studied
Answer: all other variables are held fixed.
●● To think at the margin means to consider
Answer: how a small change in one variable affects another variable.
●● The opportunity cost of something is
Answer: what you sacrifice to get it.
●● Jacinda quit her job as a blackjack dealer where she made $42,000
per year to start her own florist business. Her business expenses are
$14,000 per year on rent, $21,000 per year on supplies, and $9,000 per
year on part time help. As for her personal expenses, her apartment costs
her $12,000 per year and her personal bills are an extra $6,000 per year.
What is Jacinda's opportunity cost of running the business?
Answer: $86,000
●● Suppose that your tuition to attend college is $14,000 per year and
you spend $5,000 per year on room and board. If you were working full
time, you could earn $26,000 per year. What is your opportunity cost of
attending college?
CHANGING WORLD COMPREHENSIVE
EXAMINATION TEST COMPLETE
QUESTIONS AND CORRECT ANSWERS
●● Scarcity can best be defined as a situation in which
Answer: the resources we use to produce goods and services are limited
●● Normative economics
Answer: answers the question "What ought to be?"
●● The 3 key economic questions are:
Answer: What products do we produce?
How do we produce the products?
What consumes the products?
●● Economic models are used to
Answer: explore decision making by individuals, firms and other
organizations.
●● Would an economist consider clean air a scarce resource?
, Answer: Yes because clean air is often limited because pollution reduces
it availability.
●● The Latin phrase ceteris paribus means that when a relationship
between two variables is being studied
Answer: all other variables are held fixed.
●● To think at the margin means to consider
Answer: how a small change in one variable affects another variable.
●● The opportunity cost of something is
Answer: what you sacrifice to get it.
●● Jacinda quit her job as a blackjack dealer where she made $42,000
per year to start her own florist business. Her business expenses are
$14,000 per year on rent, $21,000 per year on supplies, and $9,000 per
year on part time help. As for her personal expenses, her apartment costs
her $12,000 per year and her personal bills are an extra $6,000 per year.
What is Jacinda's opportunity cost of running the business?
Answer: $86,000
●● Suppose that your tuition to attend college is $14,000 per year and
you spend $5,000 per year on room and board. If you were working full
time, you could earn $26,000 per year. What is your opportunity cost of
attending college?
