ECON 251 EXAM 1 STUDY GUIDE
2026/2027 COMPLETE QUESTIONS WITH
VERIFIED CORRECT ANSWERS ||
100% GUARANTEED PASS
<NEWEST VERSION>
1. Economics - ANSWER ✔ the study of the allocation of scarce resources to
meet unlimted human wants
2. Micro economics - ANSWER ✔ concerned with decision making by
individual economic agents such as firms and consumers
3. Macro Economics - ANSWER ✔ concerned with the aggregate performance
of the entire economic system
4. empirical economics - ANSWER ✔ relies upon the facts to present a
description of economic activity
5. economic theory - ANSWER ✔ relies upon principles to analyze behavior of
economic agents
6. what does economics provide - ANSWER ✔ rational choice
7. inductive logic - ANSWER ✔ creates principles for observation
,8. deductive logic - ANSWER ✔ hypothesis is formulated and tested
9. positive Econ - ANSWER ✔ concerned with what is - can be fact checked
"current unemployment rate is 20%"
10.normative Econ - ANSWER ✔ concern with what should be
"unemployment rate should not exceed 5%"
11.why does the economic problem exist - ANSWER ✔ because there is
scarcity
12.the economic problem - ANSWER ✔ involves allocation of resources
competing with wants
13.what are two reasons scarcity arises - ANSWER ✔ 1. there are unlimited
human wants
2. there are limited resources
14.Elasticity - ANSWER ✔ responsiveness to a change in price
15.Determinants of Elasticity of Demand - ANSWER ✔ 1. availability of
substitutes
2. proportion of income or budget the purchase takes
3. time
16.Ed equation - ANSWER ✔ Ed= | %ΔQd/%ΔP| or |ΔQd/ΔP x avgP/avgQd|
,17.Ed > 1 - ANSWER ✔ |%ΔQd| > |%ΔP| THUS demand is elastic
18.Ed < 1 - ANSWER ✔ |%ΔQd| < |%ΔP| THUS demand is inelastic
19.Ed = 1 - ANSWER ✔ |%ΔQd| = |%ΔP| THUS demand is unit elastic
20.income elasticity - ANSWER ✔ responsiveness of consumers to changes in
income
21.cross price elasticity - ANSWER ✔ responsiveness of consumers to change
in price of a different good
22.allocative efficiency - ANSWER ✔ using resources where they are MOST
highly valued
23.Consumer Surplus - ANSWER ✔ value consumers receive above the price
paid (CS = MB - P) (area below demand curve and above the price)
24.Producer Surplus - ANSWER ✔ value producers receive above the MC (PS
= P - MC) (area below price and above MC)
25.Economics is primarily the study of ________.
A) how agents choose to allocate scarce resources and how these
choices affect society B) the mental functions and behavior of
individuals and groups
B) the state, nation, government, and politics and policies of
governments
, C) the problems related to the existence and evolution of society
- ANSWER ✔ a. how agents choose to allocate scarce
resources and how these choices affect society
26.Which of the following statements is true?
A) A street gang is not an economic agent.
B) A government is an example of an economic agent.
C) A worker who shirks work is not an economic agent.
D) All economic agents are necessarily individuals. - ANSWER
✔ b.
27.Which of the following statements is true of economic reasoning?
A) Economic reasoning implies that leisure time is free and
costless.
B) Economic reasoning can only be used with normative choices.
C) Economic reasoning helps people make the best use of
scarce resources.
C) Economic reasoning hampers optimal decision making. -
ANSWER ✔ c.
28.Which of the following correctly identifies the trade-off that a budget
constraint represents?
A) The optimum combination of goods that a consumer with a
given income should purchase B) The amount of income that
must be given up to obtain an additional unit of a good
B) The maximum amount of two goods that a consumer can
purchase given his income
D)The amount of one good that has to be given up to purchase an additional
unit of the other
good - ANSWER ✔ d.
2026/2027 COMPLETE QUESTIONS WITH
VERIFIED CORRECT ANSWERS ||
100% GUARANTEED PASS
<NEWEST VERSION>
1. Economics - ANSWER ✔ the study of the allocation of scarce resources to
meet unlimted human wants
2. Micro economics - ANSWER ✔ concerned with decision making by
individual economic agents such as firms and consumers
3. Macro Economics - ANSWER ✔ concerned with the aggregate performance
of the entire economic system
4. empirical economics - ANSWER ✔ relies upon the facts to present a
description of economic activity
5. economic theory - ANSWER ✔ relies upon principles to analyze behavior of
economic agents
6. what does economics provide - ANSWER ✔ rational choice
7. inductive logic - ANSWER ✔ creates principles for observation
,8. deductive logic - ANSWER ✔ hypothesis is formulated and tested
9. positive Econ - ANSWER ✔ concerned with what is - can be fact checked
"current unemployment rate is 20%"
10.normative Econ - ANSWER ✔ concern with what should be
"unemployment rate should not exceed 5%"
11.why does the economic problem exist - ANSWER ✔ because there is
scarcity
12.the economic problem - ANSWER ✔ involves allocation of resources
competing with wants
13.what are two reasons scarcity arises - ANSWER ✔ 1. there are unlimited
human wants
2. there are limited resources
14.Elasticity - ANSWER ✔ responsiveness to a change in price
15.Determinants of Elasticity of Demand - ANSWER ✔ 1. availability of
substitutes
2. proportion of income or budget the purchase takes
3. time
16.Ed equation - ANSWER ✔ Ed= | %ΔQd/%ΔP| or |ΔQd/ΔP x avgP/avgQd|
,17.Ed > 1 - ANSWER ✔ |%ΔQd| > |%ΔP| THUS demand is elastic
18.Ed < 1 - ANSWER ✔ |%ΔQd| < |%ΔP| THUS demand is inelastic
19.Ed = 1 - ANSWER ✔ |%ΔQd| = |%ΔP| THUS demand is unit elastic
20.income elasticity - ANSWER ✔ responsiveness of consumers to changes in
income
21.cross price elasticity - ANSWER ✔ responsiveness of consumers to change
in price of a different good
22.allocative efficiency - ANSWER ✔ using resources where they are MOST
highly valued
23.Consumer Surplus - ANSWER ✔ value consumers receive above the price
paid (CS = MB - P) (area below demand curve and above the price)
24.Producer Surplus - ANSWER ✔ value producers receive above the MC (PS
= P - MC) (area below price and above MC)
25.Economics is primarily the study of ________.
A) how agents choose to allocate scarce resources and how these
choices affect society B) the mental functions and behavior of
individuals and groups
B) the state, nation, government, and politics and policies of
governments
, C) the problems related to the existence and evolution of society
- ANSWER ✔ a. how agents choose to allocate scarce
resources and how these choices affect society
26.Which of the following statements is true?
A) A street gang is not an economic agent.
B) A government is an example of an economic agent.
C) A worker who shirks work is not an economic agent.
D) All economic agents are necessarily individuals. - ANSWER
✔ b.
27.Which of the following statements is true of economic reasoning?
A) Economic reasoning implies that leisure time is free and
costless.
B) Economic reasoning can only be used with normative choices.
C) Economic reasoning helps people make the best use of
scarce resources.
C) Economic reasoning hampers optimal decision making. -
ANSWER ✔ c.
28.Which of the following correctly identifies the trade-off that a budget
constraint represents?
A) The optimum combination of goods that a consumer with a
given income should purchase B) The amount of income that
must be given up to obtain an additional unit of a good
B) The maximum amount of two goods that a consumer can
purchase given his income
D)The amount of one good that has to be given up to purchase an additional
unit of the other
good - ANSWER ✔ d.
