ECN 211 - EXAM 1 QUESTIONS WITH CORRECT ANSWERS LATEST UPDATE 2025/2026
Utility - Answers Pleasure or satisfaction obtained from consuming a good or service
Economizing Problem - Answers Wants exceed means
Economizing Problem - Answers Limited resources vs. unlimited wants
Individuals Economizing Problem - Answers Budget Line
Society's Economizing Problem - Answers Production Possibilities Frontier (PPF):
Factors of production - Answers the resources the economy uses to produce goods & services,
including labor, land, capital
Inverse Relationship (negative) - Answers Variables move in opposite directions (negative)
Direct Relationship (positive) - Answers Both variables move in the same direction (positive)
Equation of a Line - Answers y = a + bx
y - Answers Equation of a Line:
the variable on the vertical axis
a - Answers Equation of a Line:
the vertical intercept
b - Answers Equation of a Line:
the slope of the line
x - Answers Equation of a Line:
the variable on the horizontal axis
Infinite Slop - Answers Straight Up
Slope - Answers rise/run (△x/△y)
Vertical Intercept - Answers when x=0, point where line crosses/touches vertical axis
Centeris Paribus - Answers Assumption that all other variables are constant
Opportunity Cost - Answers whatever must be given up to obtain it
Utility - Answers Pleasure or satisfaction obtained from consumption of a good or service
Normative Economics - Answers part of economics that expresses value or normative
, judgments about economic fairness or what the outcome of the economy or goals of public
policy ought to be.
Microeconomics - Answers is the study of how households and firms make decisions and how
they interact in markets.
Macroeconomics - Answers is the study of economy-wide phenomena, including inflation,
unemployment, and economic growth.
Macro - Answers The unemployment rate in the US was 5.5 percent in February 2015.
Micro - Answers A US software firm discharged 15 workers last month and transferred the work
to India.
Micro - Answers An unexpected freeze in central Florida reduced the citrus crop and caused the
price of oranges to rise.
Macro - Answers US output, adjusted for inflation, grew by 2.4 percent 2014.
Micro - Answers Last week Wells Fargo Bank lowered its interest rate on business loans by one-
half of 1 percentage point.
positive - Answers As scientists, economists make
_____________ statements,
which attempt to describe the world as it is.
normative - Answers As policy advisors, economists make
_______________ statements,
which attempt to prescribe how the world should be.
Positive , normative - Answers ____________ statements can be confirmed or refuted,
_____________ statements cannot
Positive Economics - Answers the branch of economics that concerns the description and
explanation of economic phenomena. It focuses on facts and cause-and-effect behavioral
relationships and includes the development and testing of economics theories.
Budget Line - Answers combination of two goods one can buy with a given money income
Production Possibilities Curve (PPC) - Answers a graph that shows the combinations of
two goods the economy can possibly produce given the available resources and the available
technology
Utility - Answers Pleasure or satisfaction obtained from consuming a good or service
Economizing Problem - Answers Wants exceed means
Economizing Problem - Answers Limited resources vs. unlimited wants
Individuals Economizing Problem - Answers Budget Line
Society's Economizing Problem - Answers Production Possibilities Frontier (PPF):
Factors of production - Answers the resources the economy uses to produce goods & services,
including labor, land, capital
Inverse Relationship (negative) - Answers Variables move in opposite directions (negative)
Direct Relationship (positive) - Answers Both variables move in the same direction (positive)
Equation of a Line - Answers y = a + bx
y - Answers Equation of a Line:
the variable on the vertical axis
a - Answers Equation of a Line:
the vertical intercept
b - Answers Equation of a Line:
the slope of the line
x - Answers Equation of a Line:
the variable on the horizontal axis
Infinite Slop - Answers Straight Up
Slope - Answers rise/run (△x/△y)
Vertical Intercept - Answers when x=0, point where line crosses/touches vertical axis
Centeris Paribus - Answers Assumption that all other variables are constant
Opportunity Cost - Answers whatever must be given up to obtain it
Utility - Answers Pleasure or satisfaction obtained from consumption of a good or service
Normative Economics - Answers part of economics that expresses value or normative
, judgments about economic fairness or what the outcome of the economy or goals of public
policy ought to be.
Microeconomics - Answers is the study of how households and firms make decisions and how
they interact in markets.
Macroeconomics - Answers is the study of economy-wide phenomena, including inflation,
unemployment, and economic growth.
Macro - Answers The unemployment rate in the US was 5.5 percent in February 2015.
Micro - Answers A US software firm discharged 15 workers last month and transferred the work
to India.
Micro - Answers An unexpected freeze in central Florida reduced the citrus crop and caused the
price of oranges to rise.
Macro - Answers US output, adjusted for inflation, grew by 2.4 percent 2014.
Micro - Answers Last week Wells Fargo Bank lowered its interest rate on business loans by one-
half of 1 percentage point.
positive - Answers As scientists, economists make
_____________ statements,
which attempt to describe the world as it is.
normative - Answers As policy advisors, economists make
_______________ statements,
which attempt to prescribe how the world should be.
Positive , normative - Answers ____________ statements can be confirmed or refuted,
_____________ statements cannot
Positive Economics - Answers the branch of economics that concerns the description and
explanation of economic phenomena. It focuses on facts and cause-and-effect behavioral
relationships and includes the development and testing of economics theories.
Budget Line - Answers combination of two goods one can buy with a given money income
Production Possibilities Curve (PPC) - Answers a graph that shows the combinations of
two goods the economy can possibly produce given the available resources and the available
technology
