Econ 1500 Final Exam Study Guide with Complete Solutions

Econ 1500 Final Exam Study Guide with Complete Solutions Since air is limited in supply, it is scarce in the economic sense. - Correct Answer False Adam Smith is the Father of Economics. - Correct Answer True Economic resources include labor, human capital, natural resources, money, and capital. - Correct Answer False Voluntary trade between Maria and Alex benefits both individuals, and voluntary trade between Iceland and Ireland benefits both countries, but trade between Ireland and Iceland does not necessarily benefit all individuals in both countries. - Correct Answer True George has spent a long time on a project, and now it seems that the marginal benefit of completing the project is less than the marginal cost of completing it. Nevertheless, if George is rational, he will complete the project anyway, because he has already spent so much time working on it. - Correct Answer False Market failures include monopoly, externalities, and others. - Correct Answer True The opportunity cost to Jennifer of attending Utah State University is her tuition, books, and living expenses. - Correct Answer False Adam Smith asked the question, "Why are some nations rich and other nations poor" in 1776. That question is no longer important to economists. - Correct Answer False In the Constitutional Convention of 1787, the three controversies were: (1) How much power should the federal government have, relative to the States? (2) Should representation in Congress be proportional to a state's population, or should all states have equal representation? (3) Should slavery be abolished? - Correct Answer True Economic policy is "positive economics", while economic science is "normative economics". - Correct Answer False