MACROECONOMICS PRINCIPLES FOR A
CHANGING WORLD 6TH EDITION ERIC
CHIANG TEST BANK ALL CHAPTERS 100%
ORIGINAL VERIFIED A+ FINAL STUDY
GUIDE 2026 SOLVED QUESTIONS FULLY
CORRECT
⫸ Economics Answer: the study of the choices people make to attain
their goals, given their scare resources.
⫸ Market Answer: A group of buyers and sellers of a good or service
and the institution or arrangement by which they come together or trade
⫸ When analyzing a market we assume Answer: 1) People are rational
2) People respond to economic incentives
3) Optimal decisions are made at the margin
⫸ Comparing Marginal Cost and Marginal benefit is known as Answer:
Marginal Analysis
⫸ Trade Off Answer: The idea that because of scarcity. producing more
of one good or service means producing less of another good or service
,⫸ Opportunity Cost Answer: the highest valued alternative given up in
order to engage in some activity
⫸ Centrally Planned Economy Answer: An economy in which the
government decides how economic resources will be allocated
⫸ Market Economy Answer: An economy in which the decisions of
households and firms interacting in markets allocate economic resources
⫸ Mixed Economy Answer: An economy in which most economic
decisions result form the interaction of buyers in markets but in which
the government plays a significant role in the allocation of resources
⫸ Allocative efficiency Answer: where production is in accordance
with consumer preferences; every good or service is produced up to the
point where the last unit provides marginal benefit to society equal to the
marginal cost of producing it
⫸ Productive efficiency Answer: where goods and services are
produced at the lowest possible cost.
⫸ Voluntary exchange Answer: A Situation that occurs in markets
when both the buyer and the seller of a product are made better off by
the transaction
,⫸ Equity Answer: The fair distribution of economic benefits
⫸ Positive Analysis Answer: Analysis concerned with what is
⫸ Normative analysis Answer: analysis concerned with what ought to
be
⫸ Microeconomics Answer: The study of how households and firms
make choices, how they interact in markets, and how the government
attempts to influence their choices.
⫸ Macroeconomics Answer: the study of the economy as a whole,
including topics such as inflation, unemployment, and economic growth
⫸ Percent Change Formula Answer: Price difference divided by the
ORIGINAL amount times 100
⫸ Slope Formula Answer: rise/run or change in y over change in x
⫸ Production Possibilities Frontier (PPF) Answer: a curve showing the
maximum attainable combinations of two goods that can be produced
with available resources and current technology
⫸ Economic Growth Answer: the ability of the economy to increase the
production of goods and services
, ⫸ Economic growth must include an increase at both ends of the
production possibilities frontier. Answer: False
⫸ An increase in resources will cause the production possibilities
frontier to shift outward. Answer: True
⫸ Trade Answer: the act of buying and selling
⫸ Factors of production Answer: labor, capital, natural resources, and
other inputs to make up goods and services
⫸ Households receive payments for the factors of production by selling
them to firms in _____________ Answer: factor markets
⫸ Firms supply goods and services to ________ Answer: product
markets (households that buy these products from the firms)
⫸ Circular flow diagram Answer: a visual model of the economy that
shows how dollars flow through markets among households and firms
⫸ Free Market Answer: one with few government restrictions on how a
good or service can be produced or sold, or on how a factor of
production can be employed
CHANGING WORLD 6TH EDITION ERIC
CHIANG TEST BANK ALL CHAPTERS 100%
ORIGINAL VERIFIED A+ FINAL STUDY
GUIDE 2026 SOLVED QUESTIONS FULLY
CORRECT
⫸ Economics Answer: the study of the choices people make to attain
their goals, given their scare resources.
⫸ Market Answer: A group of buyers and sellers of a good or service
and the institution or arrangement by which they come together or trade
⫸ When analyzing a market we assume Answer: 1) People are rational
2) People respond to economic incentives
3) Optimal decisions are made at the margin
⫸ Comparing Marginal Cost and Marginal benefit is known as Answer:
Marginal Analysis
⫸ Trade Off Answer: The idea that because of scarcity. producing more
of one good or service means producing less of another good or service
,⫸ Opportunity Cost Answer: the highest valued alternative given up in
order to engage in some activity
⫸ Centrally Planned Economy Answer: An economy in which the
government decides how economic resources will be allocated
⫸ Market Economy Answer: An economy in which the decisions of
households and firms interacting in markets allocate economic resources
⫸ Mixed Economy Answer: An economy in which most economic
decisions result form the interaction of buyers in markets but in which
the government plays a significant role in the allocation of resources
⫸ Allocative efficiency Answer: where production is in accordance
with consumer preferences; every good or service is produced up to the
point where the last unit provides marginal benefit to society equal to the
marginal cost of producing it
⫸ Productive efficiency Answer: where goods and services are
produced at the lowest possible cost.
⫸ Voluntary exchange Answer: A Situation that occurs in markets
when both the buyer and the seller of a product are made better off by
the transaction
,⫸ Equity Answer: The fair distribution of economic benefits
⫸ Positive Analysis Answer: Analysis concerned with what is
⫸ Normative analysis Answer: analysis concerned with what ought to
be
⫸ Microeconomics Answer: The study of how households and firms
make choices, how they interact in markets, and how the government
attempts to influence their choices.
⫸ Macroeconomics Answer: the study of the economy as a whole,
including topics such as inflation, unemployment, and economic growth
⫸ Percent Change Formula Answer: Price difference divided by the
ORIGINAL amount times 100
⫸ Slope Formula Answer: rise/run or change in y over change in x
⫸ Production Possibilities Frontier (PPF) Answer: a curve showing the
maximum attainable combinations of two goods that can be produced
with available resources and current technology
⫸ Economic Growth Answer: the ability of the economy to increase the
production of goods and services
, ⫸ Economic growth must include an increase at both ends of the
production possibilities frontier. Answer: False
⫸ An increase in resources will cause the production possibilities
frontier to shift outward. Answer: True
⫸ Trade Answer: the act of buying and selling
⫸ Factors of production Answer: labor, capital, natural resources, and
other inputs to make up goods and services
⫸ Households receive payments for the factors of production by selling
them to firms in _____________ Answer: factor markets
⫸ Firms supply goods and services to ________ Answer: product
markets (households that buy these products from the firms)
⫸ Circular flow diagram Answer: a visual model of the economy that
shows how dollars flow through markets among households and firms
⫸ Free Market Answer: one with few government restrictions on how a
good or service can be produced or sold, or on how a factor of
production can be employed
