AECN 141 Exam 1 (All Correct 100%)

Economic agents correct answers Any individual or group making a choice/decision Scarcity correct answers When the quantity of a good desired by people exceeds the availability Economics correct answers The study of how agents choose to allocate scarce resources and how those choices affect society Behavioral Economics correct answers A field of economics that combines insights from psychology and other fields in an attempt to create a more realistic representation of human choice Finding correct answers A choice can be context dependent (affected by weather, emotions, football games, etc.) Positive Economics correct answers Statements of fact or predictions about economic behavior or outcomes Normative Economics correct answers Statements about what people ought to do, given their preferences and resources Optimization correct answers People decide what to do by considering tradeoffs among all feasible alternatives and choosing the best of those, given certain constraints Equilibrium correct answers A condition in which no individual can change their decision and make themselves better off; a result of the optimization principle Utility correct answers Satisfaction Accounting Profits correct answers Revenues minus only those costs you explicitly have to pay Economic Profits correct answers Revenues minus all costs (real and opportunity costs) Accounting Profits correct answers For a farmer, it does NOT include the value of the farmer's time Economic Profits correct answers For a farmer, it does include the value of the farmer's time Tradeoffs correct answers Arise when some benefits must be given up to obtain others Opportunity Cost correct answers The best alternative to the chosen course of action. The loss in value given up by specific choice. Net Benefits correct answers Benefits - costs