ECON B-251 Final EXAM 1 Questions
With 100% Correct Answers 2025-2026
Updated.
economics - Answer the study of satisfying unlimited wants by utilizing limited resources
scarcity - Answer unlimited wants and limited resources
the economic problem - Answer deals with the problem of scarcity
Microeconomics - Answer studies decisions by individual firms and governments
Macroeconomics - Answer studies decisions made or actions taken by the entire economy
ex. inflation, unemployment, GDP
rationality assumption - Answer assumes that people do not intentionally make decisions that
would leave them worse off.
bounded rationality - Answer assumes peoples rationality is constrained because they do not
have full information
prospect theory - Answer demonstrates how people react differently to potential loss and
potential gain.
maximizer - Answer try to make optimal decisions based on the rationality assumption
satisficer - Answer try to find a "good enough" solution based on bounded rationality
self-interest - Answer pursuit of one's own goals. Maximize happiness.
social-interest - Answer choices that are best for society as a whole
, strategic - Answer decisions based on others' decisions as well as one's cost and benefits
opportunity cost - Answer The highest-valued, next-best alternative that must be sacrificed to
obtain something or to satisfy a want
marginal analysis - Answer evaluates the consequences of making incremental changes in the
use of their resources
positive economics - Answer purely descriptive statements or scientific predictions- a
statement of what is.
normative economics - Answer analysis involving value judgements-- what ought to be
models - Answer Simplified representations of the real world used as the basis for predictions
or explanations
three scarcity questions - Answer 1. what to produce?
2. how to produce?
3. for whom?
Four factors of production - Answer land, labor, capital, entrepreneurship
Two types of capital - Answer human (knowledge) and physical (machines)
marginal cost - Answer the opportunity cost of producing one more unit of a good
marginal benefit - Answer the additional benefit to a consumer from consuming one more
unit of a good or service
decreasing marginal benefit - Answer the maximum amount of money a consumer is willing to
pay for an additional good or service is decreasing.
With 100% Correct Answers 2025-2026
Updated.
economics - Answer the study of satisfying unlimited wants by utilizing limited resources
scarcity - Answer unlimited wants and limited resources
the economic problem - Answer deals with the problem of scarcity
Microeconomics - Answer studies decisions by individual firms and governments
Macroeconomics - Answer studies decisions made or actions taken by the entire economy
ex. inflation, unemployment, GDP
rationality assumption - Answer assumes that people do not intentionally make decisions that
would leave them worse off.
bounded rationality - Answer assumes peoples rationality is constrained because they do not
have full information
prospect theory - Answer demonstrates how people react differently to potential loss and
potential gain.
maximizer - Answer try to make optimal decisions based on the rationality assumption
satisficer - Answer try to find a "good enough" solution based on bounded rationality
self-interest - Answer pursuit of one's own goals. Maximize happiness.
social-interest - Answer choices that are best for society as a whole
, strategic - Answer decisions based on others' decisions as well as one's cost and benefits
opportunity cost - Answer The highest-valued, next-best alternative that must be sacrificed to
obtain something or to satisfy a want
marginal analysis - Answer evaluates the consequences of making incremental changes in the
use of their resources
positive economics - Answer purely descriptive statements or scientific predictions- a
statement of what is.
normative economics - Answer analysis involving value judgements-- what ought to be
models - Answer Simplified representations of the real world used as the basis for predictions
or explanations
three scarcity questions - Answer 1. what to produce?
2. how to produce?
3. for whom?
Four factors of production - Answer land, labor, capital, entrepreneurship
Two types of capital - Answer human (knowledge) and physical (machines)
marginal cost - Answer the opportunity cost of producing one more unit of a good
marginal benefit - Answer the additional benefit to a consumer from consuming one more
unit of a good or service
decreasing marginal benefit - Answer the maximum amount of money a consumer is willing to
pay for an additional good or service is decreasing.
