UVA Econ 2010 Midterm 1 Test
Questions All Answered Correct
2025\2026 Updated.
Economics - Answer The study of how human beings coordinate their wants and desires given
the decision-making mechanisms, social customs, and political realities of the society.
The Three Central Problems - Answer 1. What, and how much to produce
2. How to produce it
3. For whom to produce it
Scarcity - Answer The goods available are too few to satisfy individuals' desires
Coercion - Answer How to deal with scarcity: limiting people's wants and increasing the
amount of work individuals are willing to do to fulfill those wants.
Microeconomic Theory - Answer The study of individual choice, and how that choice is
influenced by economic forces
Macroeconomic Theory - Answer The study of the economy as a whole
Marginal Cost - Answer The additional cost to you over and above the costs you have already
incurred.
Sunk Costs - Answer Costs that have already been incurred and cannot be recovered
Marginal Benefit - Answer The additional benefit above what you've already derived
Economic Decision Rule - Answer 1. If the marginal benefits of doing something exceed the
marginal costs, do it.
2. If the marginal costs of doing something exceed the marginal benefits, don't do it.
, Economic Forces - Answer The necessary reactions to scarcity (the desire to make money)
Market Force - Answer An economic force that is given relatively free rein by society to work
through the market. Ration by changing prices.
Invisible Hand - Answer The price mechanism, the rise and fall of prices that guides our
actions in a market
Social Forces - Answer Forces that guide individual actions even though those actions may not
be in an individual's selfish interest
Political Forces - Answer Legal directives that direct individuals' actions
Economic Model - Answer A framework that places the generalized insights of the theory in a
more specific contextual setting
Economic Principle - Answer A commonly held economic insight stated as a law or principle
Experimental Economics - Answer A branch of economics that studies the economy through
controlled experiments
Economic Theorem - Answer Proposition that is logically true based on the assumptions in a
model
Policy Precept - Answer Policy rules that conclude that a particular course of action is
preferable
Efficiency - Answer Achieving a goal as cheaply as possible
Invisible Hand Theorem - Answer Efficiency - a market economy, through the price
mechanism, will tend to allocate resources efficiently
Economic Policies - Answer Actions (or inaction) taken by government to influence economic
Questions All Answered Correct
2025\2026 Updated.
Economics - Answer The study of how human beings coordinate their wants and desires given
the decision-making mechanisms, social customs, and political realities of the society.
The Three Central Problems - Answer 1. What, and how much to produce
2. How to produce it
3. For whom to produce it
Scarcity - Answer The goods available are too few to satisfy individuals' desires
Coercion - Answer How to deal with scarcity: limiting people's wants and increasing the
amount of work individuals are willing to do to fulfill those wants.
Microeconomic Theory - Answer The study of individual choice, and how that choice is
influenced by economic forces
Macroeconomic Theory - Answer The study of the economy as a whole
Marginal Cost - Answer The additional cost to you over and above the costs you have already
incurred.
Sunk Costs - Answer Costs that have already been incurred and cannot be recovered
Marginal Benefit - Answer The additional benefit above what you've already derived
Economic Decision Rule - Answer 1. If the marginal benefits of doing something exceed the
marginal costs, do it.
2. If the marginal costs of doing something exceed the marginal benefits, don't do it.
, Economic Forces - Answer The necessary reactions to scarcity (the desire to make money)
Market Force - Answer An economic force that is given relatively free rein by society to work
through the market. Ration by changing prices.
Invisible Hand - Answer The price mechanism, the rise and fall of prices that guides our
actions in a market
Social Forces - Answer Forces that guide individual actions even though those actions may not
be in an individual's selfish interest
Political Forces - Answer Legal directives that direct individuals' actions
Economic Model - Answer A framework that places the generalized insights of the theory in a
more specific contextual setting
Economic Principle - Answer A commonly held economic insight stated as a law or principle
Experimental Economics - Answer A branch of economics that studies the economy through
controlled experiments
Economic Theorem - Answer Proposition that is logically true based on the assumptions in a
model
Policy Precept - Answer Policy rules that conclude that a particular course of action is
preferable
Efficiency - Answer Achieving a goal as cheaply as possible
Invisible Hand Theorem - Answer Efficiency - a market economy, through the price
mechanism, will tend to allocate resources efficiently
Economic Policies - Answer Actions (or inaction) taken by government to influence economic
