Econ 2010 Midterm 1 Test Questions
And 100% Correct and Verified
Answers.
Positive vs. normative - Answer Positive is how it "is", normative is "should"
What fact of life is the reason we have the discipline of economics? - Answer Scarcity
Economics is the science of ______________ - Answer choice
Difference between economics and sociology - Answer Economics is how people make
choices, sociology considers lack of choices
2 examples of a financial penalty - Answer Rated fine, and a lump-sum fine
School principal lump sum vs rated fine example - Answer If you're a principal, a rated fine
would be more effective than a lump-sum fine for punishing parents late picking up their kids,
because rates affect behavior on margin
Rated financial penalties affects behavior _____ - Answer on the margin
3 fundamental questions every economy must address - Answer - What goods are going to be
produced?
- How are they going to be produced?
- Who will consume the goods produced?
3 kinds of basic economic systems - Answer - Traditional
- Planned/Command/Central planning (socialism)
- Market (Price system)
Friedrick Bastier - Answer - Entered Paris, and realized how many people would die if
everyone suddently stopped infrastructure. Thus, "invisible hand".
, Principle of increasing marginal opportunity cost - Answer The more you get of one thing, the
more you have to give up of another relative to a smaller margin
How to decide "What, how, and whom?" for Market System? - Answer - What? -> Dollar votes
- How? -> Input prices
- Who? -> Those who can and want to pay
Conditions required for market economy to exist - Answer - Allowed to work for wages
- Private property
- Has to be winners and losers
- Markets
3 aspects of private property rights - Answer - Exclusion
- Use/consumption of goods
- Tranferrable/trade
What does a technological advancement lead to? - Answer - Decrease in input costs/increase
in supply
What determines consumer preference? - Answer - Taste
- Level of income
- Price of good
- Price of substitutes/complements
- Consumer expectations
- Taxes and subsidies
Collander says 4 things affect supply, but Elzinga cares about 2 - Answer - Changes in
technology
- Changes in input costs
Substitution effect - Answer - People substitute from one good to another with a lower price,
And 100% Correct and Verified
Answers.
Positive vs. normative - Answer Positive is how it "is", normative is "should"
What fact of life is the reason we have the discipline of economics? - Answer Scarcity
Economics is the science of ______________ - Answer choice
Difference between economics and sociology - Answer Economics is how people make
choices, sociology considers lack of choices
2 examples of a financial penalty - Answer Rated fine, and a lump-sum fine
School principal lump sum vs rated fine example - Answer If you're a principal, a rated fine
would be more effective than a lump-sum fine for punishing parents late picking up their kids,
because rates affect behavior on margin
Rated financial penalties affects behavior _____ - Answer on the margin
3 fundamental questions every economy must address - Answer - What goods are going to be
produced?
- How are they going to be produced?
- Who will consume the goods produced?
3 kinds of basic economic systems - Answer - Traditional
- Planned/Command/Central planning (socialism)
- Market (Price system)
Friedrick Bastier - Answer - Entered Paris, and realized how many people would die if
everyone suddently stopped infrastructure. Thus, "invisible hand".
, Principle of increasing marginal opportunity cost - Answer The more you get of one thing, the
more you have to give up of another relative to a smaller margin
How to decide "What, how, and whom?" for Market System? - Answer - What? -> Dollar votes
- How? -> Input prices
- Who? -> Those who can and want to pay
Conditions required for market economy to exist - Answer - Allowed to work for wages
- Private property
- Has to be winners and losers
- Markets
3 aspects of private property rights - Answer - Exclusion
- Use/consumption of goods
- Tranferrable/trade
What does a technological advancement lead to? - Answer - Decrease in input costs/increase
in supply
What determines consumer preference? - Answer - Taste
- Level of income
- Price of good
- Price of substitutes/complements
- Consumer expectations
- Taxes and subsidies
Collander says 4 things affect supply, but Elzinga cares about 2 - Answer - Changes in
technology
- Changes in input costs
Substitution effect - Answer - People substitute from one good to another with a lower price,
