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ECN 221 Exam 1 Review Questions And
Answers 100% Pass
When and where was "economics" as a science born? - ANS 17th and 18th century in
Western Europe
Changes in what three institutions led to the fall of feudalism and the rise of capitalism as an
economic system? - ANS culture, politics, and economy
Who was the father of modern economic thought? To what group of economists did he belong
to? - ANS Adam Smith and he belonged to classical economists.
The founder of modern economic thought told a story about what three professions when he
explained how individual self-interest promotes the greatest benefits for society. -
ANS Butcher, brewer, and baker
Who developed the first macroeconomic theory? This development was in response to what
worldwide event? - ANS John Keynes developed the theory in response to the great
depression.
List and briefly define the various forms of non-capitalist production in US history? In what
regions did these forms of economic production exist? - ANS 1. Slavery in the south
2. Self-sufficient farming in the midwest
3. Communal production in the west
, ©EVERLY 2025 ALL RIGHTS RESERVED
List the two main branches of economics? - ANS 1. Micro
2. Macro
What is economics? - ANS Science that studies choices.
What is scarcity? - ANS Limited resources for unlimited wants
What are the three economic resources/ factors of production? - ANS Land, Capital, and
labor
What two assumptions do economists make about human nature - ANS 1. Rational
2. Maximizers
Define opportunity cost - ANS The next best alternative we give up when we make a choice.
Explain the idea: "There is no such thing as a free lunch." Is there any circumstance when there
is a possibility of obtaining a "free lunch"? - ANS Everything we do/choice we make has an
opportunity cost. It is possible to obtain a "free lunch" when we are inefficient.
How can a change in opportunity costs affect a person's behavior? - ANS If prices increase
we become less willing, when the prices decrease we become more willing.
When we make decisions to either purchase or consume an additional unit of a good or
participate in an extra unit of an activity, we compare the ____and the ___of that decision -
ANS 1. marginal costs
2. marginal benefits
ECN 221 Exam 1 Review Questions And
Answers 100% Pass
When and where was "economics" as a science born? - ANS 17th and 18th century in
Western Europe
Changes in what three institutions led to the fall of feudalism and the rise of capitalism as an
economic system? - ANS culture, politics, and economy
Who was the father of modern economic thought? To what group of economists did he belong
to? - ANS Adam Smith and he belonged to classical economists.
The founder of modern economic thought told a story about what three professions when he
explained how individual self-interest promotes the greatest benefits for society. -
ANS Butcher, brewer, and baker
Who developed the first macroeconomic theory? This development was in response to what
worldwide event? - ANS John Keynes developed the theory in response to the great
depression.
List and briefly define the various forms of non-capitalist production in US history? In what
regions did these forms of economic production exist? - ANS 1. Slavery in the south
2. Self-sufficient farming in the midwest
3. Communal production in the west
, ©EVERLY 2025 ALL RIGHTS RESERVED
List the two main branches of economics? - ANS 1. Micro
2. Macro
What is economics? - ANS Science that studies choices.
What is scarcity? - ANS Limited resources for unlimited wants
What are the three economic resources/ factors of production? - ANS Land, Capital, and
labor
What two assumptions do economists make about human nature - ANS 1. Rational
2. Maximizers
Define opportunity cost - ANS The next best alternative we give up when we make a choice.
Explain the idea: "There is no such thing as a free lunch." Is there any circumstance when there
is a possibility of obtaining a "free lunch"? - ANS Everything we do/choice we make has an
opportunity cost. It is possible to obtain a "free lunch" when we are inefficient.
How can a change in opportunity costs affect a person's behavior? - ANS If prices increase
we become less willing, when the prices decrease we become more willing.
When we make decisions to either purchase or consume an additional unit of a good or
participate in an extra unit of an activity, we compare the ____and the ___of that decision -
ANS 1. marginal costs
2. marginal benefits
