ECON 202, EXAM 1- MCGINNESS OLE
MISS QUESTIONS & UPDATED
ANSWERS RATED 100% CORRECT
economics - Correct Answer ✔✔ study of choice under scarcity
microeconomics - Correct Answer ✔✔ study of individual decision making by firms and
individuals
macroeconomics - Correct Answer ✔✔ study of aggregate behavior including
unemployment, inflation, recessions, and other economy wide phenomenon
positive economic statement - Correct Answer ✔✔ addresses how world is and can be
refuted with evidence. ex: selling alcohol on Sundays in Oxford will increase profits for
local restaurants
normative economic statement - Correct Answer ✔✔ addresses how the world should
be and is based on values/criteria that the speaker determines. ex: it is better for Oxford
and ole miss if alcohol remains restricted on Sundays
marginalism - Correct Answer ✔✔ thinking on the margins, key for maximizing outcome.
ex: how many people should I invite to a beach condo for spring break
opportunity cost - Correct Answer ✔✔ forgone best alternative to any activity. decision
makers always consider this and not just explicit costs. ex: going to the beach for a
week and spending $500 has an opportunity cost of the best alternative use of a week's
income plus $500
efficient markets - Correct Answer ✔✔ profit opportunities are quickly seized upon and
therefore eliminated almost instantaneously. ex: mining bitcoins because price might get
driven up
ceteris paribus - Correct Answer ✔✔ principle that everything outside of the model is
held constant
opportunity cost - Correct Answer ✔✔ the loss of potential gain from other alternatives
when one alternative is chosen
PPF (Production Possibilities Frontier) - Correct Answer ✔✔ a graph that shows the
maximum quantities of two different goods that an economic entity can produce
points outside the ppf - Correct Answer ✔✔ impossible to produce
, points on the ppf - Correct Answer ✔✔ where all resources are employed and used
efficiently
points inside the ppf - Correct Answer ✔✔ where resources are idle or used inefficiently
what shifts ppf outward - Correct Answer ✔✔ some resources are not perfectly
transferable
why would a realistic ppf be bowed out or concave - Correct Answer ✔✔ resources are
not perfectly substitutes
law of increasing opportunity cost - Correct Answer ✔✔ the opportunity costs of
producing a good increases with more production of that good
absolute advantage - Correct Answer ✔✔ ability to produce more with the same or
more resources
comparative advantage - Correct Answer ✔✔ ability to produce with less opportunity
cost; theory is where everyone can benefit from trade by specializing in the goods and
services where they have this
find opportunity cost!!!! - Correct Answer ✔✔ rancher vs. farmer example
command economy - Correct Answer ✔✔ when a central authority determines what is
produced, how it is produced, and who consumes it
market economy - Correct Answer ✔✔ when individuals make decisions in
decentralized markets for their own self-interest
product markets - Correct Answer ✔✔ markets for good and services
resource factor markets - Correct Answer ✔✔ market for factors of production
households - Correct Answer ✔✔ maximize satisfaction from consumption, the given
price of goods, services, and wages
firms - Correct Answer ✔✔ maximize profits and return to investors
product markets - Correct Answer ✔✔ households demand and firms supply
resource factor markets - Correct Answer ✔✔ households supply and firms demand
demand - Correct Answer ✔✔ relationship between quantity demanded and price
quantity demanded - Correct Answer ✔✔ number of units buyers are willing and able to
purchase at a given price
MISS QUESTIONS & UPDATED
ANSWERS RATED 100% CORRECT
economics - Correct Answer ✔✔ study of choice under scarcity
microeconomics - Correct Answer ✔✔ study of individual decision making by firms and
individuals
macroeconomics - Correct Answer ✔✔ study of aggregate behavior including
unemployment, inflation, recessions, and other economy wide phenomenon
positive economic statement - Correct Answer ✔✔ addresses how world is and can be
refuted with evidence. ex: selling alcohol on Sundays in Oxford will increase profits for
local restaurants
normative economic statement - Correct Answer ✔✔ addresses how the world should
be and is based on values/criteria that the speaker determines. ex: it is better for Oxford
and ole miss if alcohol remains restricted on Sundays
marginalism - Correct Answer ✔✔ thinking on the margins, key for maximizing outcome.
ex: how many people should I invite to a beach condo for spring break
opportunity cost - Correct Answer ✔✔ forgone best alternative to any activity. decision
makers always consider this and not just explicit costs. ex: going to the beach for a
week and spending $500 has an opportunity cost of the best alternative use of a week's
income plus $500
efficient markets - Correct Answer ✔✔ profit opportunities are quickly seized upon and
therefore eliminated almost instantaneously. ex: mining bitcoins because price might get
driven up
ceteris paribus - Correct Answer ✔✔ principle that everything outside of the model is
held constant
opportunity cost - Correct Answer ✔✔ the loss of potential gain from other alternatives
when one alternative is chosen
PPF (Production Possibilities Frontier) - Correct Answer ✔✔ a graph that shows the
maximum quantities of two different goods that an economic entity can produce
points outside the ppf - Correct Answer ✔✔ impossible to produce
, points on the ppf - Correct Answer ✔✔ where all resources are employed and used
efficiently
points inside the ppf - Correct Answer ✔✔ where resources are idle or used inefficiently
what shifts ppf outward - Correct Answer ✔✔ some resources are not perfectly
transferable
why would a realistic ppf be bowed out or concave - Correct Answer ✔✔ resources are
not perfectly substitutes
law of increasing opportunity cost - Correct Answer ✔✔ the opportunity costs of
producing a good increases with more production of that good
absolute advantage - Correct Answer ✔✔ ability to produce more with the same or
more resources
comparative advantage - Correct Answer ✔✔ ability to produce with less opportunity
cost; theory is where everyone can benefit from trade by specializing in the goods and
services where they have this
find opportunity cost!!!! - Correct Answer ✔✔ rancher vs. farmer example
command economy - Correct Answer ✔✔ when a central authority determines what is
produced, how it is produced, and who consumes it
market economy - Correct Answer ✔✔ when individuals make decisions in
decentralized markets for their own self-interest
product markets - Correct Answer ✔✔ markets for good and services
resource factor markets - Correct Answer ✔✔ market for factors of production
households - Correct Answer ✔✔ maximize satisfaction from consumption, the given
price of goods, services, and wages
firms - Correct Answer ✔✔ maximize profits and return to investors
product markets - Correct Answer ✔✔ households demand and firms supply
resource factor markets - Correct Answer ✔✔ households supply and firms demand
demand - Correct Answer ✔✔ relationship between quantity demanded and price
quantity demanded - Correct Answer ✔✔ number of units buyers are willing and able to
purchase at a given price
