Econ 111 Quiz 1 || GUARANTEED PASS!!
Economics correct answers study of how people make choices under conditions of scarcity
and of the results of these choices for society
Economics correct answers Way of describing economic events, explaining why such events
occur, predicting under what circumstances such events might take place in the future, and
recommending appropriate courses of action
The Scarcity Principle (No-Free-Lunch Principle) correct answers Although we have
boundless needs and wants, the resources available to us are limited -- so having more of one
good thing usually means having less of another
The Cost-Benefit Principle correct answers An individual (or a firm or a society) should
(tends to/will) take an action if, and only if, the extra benefits from taking the action are at
least as great as the extra costs (i.e. marginal thinking)
Gross Domestic Product (GDP) correct answers The market value of the final goods and
services produced in a country during a given period
Gross National Product (GNP) correct answers The market value of the final goods and
services produced by citizens of a country during a given period
Firms correct answers They have the economy's "know-how" and then hire resources with
which to produce goods and services
Households correct answers They own the economy's resources and purchase the goods and
services produced by firms
GDP (expenditure approach) correct answers Total spending on final goods and services
produced within a nation during a specified period of time
GDP = C + I + G + NX correct answers What is the equation for GDP (expenditure
approach)?
Inventory correct answers The difference between the end-of-the-year and beginning-of-the-
year _____ is considered to be purchased by the company that produced it
Consumption expenditures correct answers What is the biggest contributor to GDP?
False correct answers True/False: GDP is a measure of wellbeing
Real GDP correct answers A measure of GDP in which the quantities produced are valued at
the prices in a base year rather than at current prices; measures the actual physical volume of
production
Chain weighting correct answers How we deal with the base year problem within countries
Chain weight, purchasing power parity (PPP) and exchange rates correct answers How we
deal with the base year problem across countries
Economics correct answers study of how people make choices under conditions of scarcity
and of the results of these choices for society
Economics correct answers Way of describing economic events, explaining why such events
occur, predicting under what circumstances such events might take place in the future, and
recommending appropriate courses of action
The Scarcity Principle (No-Free-Lunch Principle) correct answers Although we have
boundless needs and wants, the resources available to us are limited -- so having more of one
good thing usually means having less of another
The Cost-Benefit Principle correct answers An individual (or a firm or a society) should
(tends to/will) take an action if, and only if, the extra benefits from taking the action are at
least as great as the extra costs (i.e. marginal thinking)
Gross Domestic Product (GDP) correct answers The market value of the final goods and
services produced in a country during a given period
Gross National Product (GNP) correct answers The market value of the final goods and
services produced by citizens of a country during a given period
Firms correct answers They have the economy's "know-how" and then hire resources with
which to produce goods and services
Households correct answers They own the economy's resources and purchase the goods and
services produced by firms
GDP (expenditure approach) correct answers Total spending on final goods and services
produced within a nation during a specified period of time
GDP = C + I + G + NX correct answers What is the equation for GDP (expenditure
approach)?
Inventory correct answers The difference between the end-of-the-year and beginning-of-the-
year _____ is considered to be purchased by the company that produced it
Consumption expenditures correct answers What is the biggest contributor to GDP?
False correct answers True/False: GDP is a measure of wellbeing
Real GDP correct answers A measure of GDP in which the quantities produced are valued at
the prices in a base year rather than at current prices; measures the actual physical volume of
production
Chain weighting correct answers How we deal with the base year problem within countries
Chain weight, purchasing power parity (PPP) and exchange rates correct answers How we
deal with the base year problem across countries
