BRCC ECON 2113 Midterm Questions With
Complete Solutions
economics the study of how humans make decisions in the face of scarcity
microeconomics focuses on the actions of individual agents within the economy, like
households, workers, and business
macroeconomics the branch of economics that focuses on broad issues such as growth,
unemployment, inflation, and trade balance
scarcity human wants for goods, services, and resources exceed what is available
circular flow model shows how households and firms interact in the good and services
market, and in the labor market
trade offs any situation where making one choice means losing something else, usually
forgoing a benefit or opportunity.
, BRCC ECON 2113 Midterm Questions With
Complete Solutions
rational behavior decision making process that is based on making choices that result in
the optimal level of benefit or utility for an indiviudal
opportunity cost indicates what one must give up to obtain what he or she desires
budget constraint all possible consumption combinations of goods that someone can
afford, given the prices of goods, when all income is spent; the boundary of the opportunity set
production possibility frontier a diagram that shows the productively efficient
combinations of two products that an economy can produce given the resources it has available
PFF opportunity cost producing a specific good is different in other countries. either
because of different climates, geography, technology, or skills
PFF efficiency when it is impossible to produce more of one good without decreasing the
quantity produced of another good
Complete Solutions
economics the study of how humans make decisions in the face of scarcity
microeconomics focuses on the actions of individual agents within the economy, like
households, workers, and business
macroeconomics the branch of economics that focuses on broad issues such as growth,
unemployment, inflation, and trade balance
scarcity human wants for goods, services, and resources exceed what is available
circular flow model shows how households and firms interact in the good and services
market, and in the labor market
trade offs any situation where making one choice means losing something else, usually
forgoing a benefit or opportunity.
, BRCC ECON 2113 Midterm Questions With
Complete Solutions
rational behavior decision making process that is based on making choices that result in
the optimal level of benefit or utility for an indiviudal
opportunity cost indicates what one must give up to obtain what he or she desires
budget constraint all possible consumption combinations of goods that someone can
afford, given the prices of goods, when all income is spent; the boundary of the opportunity set
production possibility frontier a diagram that shows the productively efficient
combinations of two products that an economy can produce given the resources it has available
PFF opportunity cost producing a specific good is different in other countries. either
because of different climates, geography, technology, or skills
PFF efficiency when it is impossible to produce more of one good without decreasing the
quantity produced of another good
