PRINCIPLES OF ECONOMICS EXAM STUDY
GUIDE 2026 QUESTIONS WITH SOLUTIONS
GRADED A+
◉ Trade-Offs. Answer: involve opportunity cost, the value of the best
alternative given up
◉ Productive efficiency: Answer: Productive efficiency: A situation in
which a good or service is produced at the lowest possible cost
◉ a production possibilities frontier (PPF). Answer: A production
possibilities frontier (PPF) is a curve showing the maximum attainable
combinations of two products that may be produced with available
resources (e.g. workers, materials, machinery...) and technology.
◉ centrally planned economy. Answer: an economy in which the
government decides how economic resources will be allocated
◉ market economy. Answer: the decisions of housholds, firms, and
individuals interacting in the market allocates resources.
, ◉ mixed economy. Answer: an economy in which most economic
decisions are from the interaction of buyers and sellers in a market but in
which the government plays a significant roll in the allocation of
resources.
◉ microeconomics. Answer: study of how households and firms make
choices in the market, how they interact. and how the government
attempts to influence their interactions
◉ macroeconomics. Answer: the study of an economy as a whole,
inflation, unemployment and economic growth.
◉ profit. Answer: revenue-costs
◉ factors of production/economic resources/input. Answer: labor,
capital, natural resources, entrepreneurs.
◉ human capital. Answer: skills and training that workers posses
◉ slope. Answer: rise over run. change in y over change of x.
◉ Percentage change forumla. Answer: ((value in first period - value in
second period)/value in the first period) x 100
GUIDE 2026 QUESTIONS WITH SOLUTIONS
GRADED A+
◉ Trade-Offs. Answer: involve opportunity cost, the value of the best
alternative given up
◉ Productive efficiency: Answer: Productive efficiency: A situation in
which a good or service is produced at the lowest possible cost
◉ a production possibilities frontier (PPF). Answer: A production
possibilities frontier (PPF) is a curve showing the maximum attainable
combinations of two products that may be produced with available
resources (e.g. workers, materials, machinery...) and technology.
◉ centrally planned economy. Answer: an economy in which the
government decides how economic resources will be allocated
◉ market economy. Answer: the decisions of housholds, firms, and
individuals interacting in the market allocates resources.
, ◉ mixed economy. Answer: an economy in which most economic
decisions are from the interaction of buyers and sellers in a market but in
which the government plays a significant roll in the allocation of
resources.
◉ microeconomics. Answer: study of how households and firms make
choices in the market, how they interact. and how the government
attempts to influence their interactions
◉ macroeconomics. Answer: the study of an economy as a whole,
inflation, unemployment and economic growth.
◉ profit. Answer: revenue-costs
◉ factors of production/economic resources/input. Answer: labor,
capital, natural resources, entrepreneurs.
◉ human capital. Answer: skills and training that workers posses
◉ slope. Answer: rise over run. change in y over change of x.
◉ Percentage change forumla. Answer: ((value in first period - value in
second period)/value in the first period) x 100
