ECON 252 Questions with Correct Answers (Grade A+)
Question 1: Microeconomics studies...
Answer: a small piece of the overall economy
Question 2: Macroeconomics studies...
Answer: the economy as a whole
Question 3: Policy decisions made by the government are analyzed by
a) only microeconomics
b) neither microeconomics nor macroeconomics
c) only macroeconomics
d) both microeconomics and macroeconomics
Answer: d) both microeconomics and macroeconomics
Question 4: What are three principles of economics?
Answer: 1) Optimization
2) Equilibrium
3) Empricism
Question 5: Equilibrium describes a situation where a)no one would benefit from changing his or her
behavior
b) economists use data to analyze what is happening in the world
c) people weigh costs and benefits when making a decision
Answer: a) no one would benefit from changing his or her behavior
Question 6: Empiricism describes a situation where a)no one would benefit from changing his or her
behavior
b) economists use data to analyze what is happening in the world
c) people weigh costs and benefits when making a decision
Answer: b) economists use data to analyze what is happening in the world
Question 7: Optimization describes a situation where a)no one would benefit from changing his or her
behavior
b) economists use data to analyze what is happening in the world
c) people weigh costs and benefits when making a decision
Answer: c) people weigh costs and benefits when making a decision
Page 1
, Question 8: How would you evaluate options and choose an optimal one?
Answer: Do cost-benefit analysis to compare the alternatives
Question 9: When you make your decision about what activity to choose, what two costs should you
consider?
Answer: 1) Monetary Cost
2) Opportunity Cost
Question 10: When making an optimal choice, the goal is to choose the option that offers...
Answer: the greatest net benefits
Question 11: For a market to be in equilibrium, three conditions must hold. The amount produced by
sellers must be ____________ to the amount purchased by buyers
Answer: The amount produced by sellers must be EQUAL to the amount purchased by buyers
Question 12: For a market to be in equilibrium, three conditions must hold. The costs of making a
product must be _____________ the final price at which the product sells.
Answer: The costs of making a product must be LESS THAN the final price at which the product sells.
Question 13: For a market to be in equilibrium, three conditions must hold. Buyers must place a value
on the uses of the product that is _____________ the cost of buying the product
Answer: Buyers must place a value on the uses of the product that is GREATER THAN the cost of buying
the product
Question 14: In equilibrium, everyone
a) faces a trade-off, such that the individual must give up one thing to get something else.
b) simultaneously optimizes, so that nobody benefits by changing his or her own behavior
c) maximizes his or her benefits, so that opportunity costs and trade-offs are eliminated
d) benefits by changing his or her own behavior
Answer: b) simultaneously optimizes, so that nobody benefits by changing his or her own behavior
Question 15: What is the concept of causation?
Answer: how one event can bring about change in another
Page 2
Question 1: Microeconomics studies...
Answer: a small piece of the overall economy
Question 2: Macroeconomics studies...
Answer: the economy as a whole
Question 3: Policy decisions made by the government are analyzed by
a) only microeconomics
b) neither microeconomics nor macroeconomics
c) only macroeconomics
d) both microeconomics and macroeconomics
Answer: d) both microeconomics and macroeconomics
Question 4: What are three principles of economics?
Answer: 1) Optimization
2) Equilibrium
3) Empricism
Question 5: Equilibrium describes a situation where a)no one would benefit from changing his or her
behavior
b) economists use data to analyze what is happening in the world
c) people weigh costs and benefits when making a decision
Answer: a) no one would benefit from changing his or her behavior
Question 6: Empiricism describes a situation where a)no one would benefit from changing his or her
behavior
b) economists use data to analyze what is happening in the world
c) people weigh costs and benefits when making a decision
Answer: b) economists use data to analyze what is happening in the world
Question 7: Optimization describes a situation where a)no one would benefit from changing his or her
behavior
b) economists use data to analyze what is happening in the world
c) people weigh costs and benefits when making a decision
Answer: c) people weigh costs and benefits when making a decision
Page 1
, Question 8: How would you evaluate options and choose an optimal one?
Answer: Do cost-benefit analysis to compare the alternatives
Question 9: When you make your decision about what activity to choose, what two costs should you
consider?
Answer: 1) Monetary Cost
2) Opportunity Cost
Question 10: When making an optimal choice, the goal is to choose the option that offers...
Answer: the greatest net benefits
Question 11: For a market to be in equilibrium, three conditions must hold. The amount produced by
sellers must be ____________ to the amount purchased by buyers
Answer: The amount produced by sellers must be EQUAL to the amount purchased by buyers
Question 12: For a market to be in equilibrium, three conditions must hold. The costs of making a
product must be _____________ the final price at which the product sells.
Answer: The costs of making a product must be LESS THAN the final price at which the product sells.
Question 13: For a market to be in equilibrium, three conditions must hold. Buyers must place a value
on the uses of the product that is _____________ the cost of buying the product
Answer: Buyers must place a value on the uses of the product that is GREATER THAN the cost of buying
the product
Question 14: In equilibrium, everyone
a) faces a trade-off, such that the individual must give up one thing to get something else.
b) simultaneously optimizes, so that nobody benefits by changing his or her own behavior
c) maximizes his or her benefits, so that opportunity costs and trade-offs are eliminated
d) benefits by changing his or her own behavior
Answer: b) simultaneously optimizes, so that nobody benefits by changing his or her own behavior
Question 15: What is the concept of causation?
Answer: how one event can bring about change in another
Page 2
