©SOPHIABENNETT@2024-2025 Monday, August 26, 2024 6:09 AM
ECON 211 - Final Exam Study Guide with
Complete Solutions
Economics - Answer✔️✔️-the study of how society manages its scarce
resources
efficiency and equity - Answer✔️✔️-There is often a trade-off between
______________ ; society tries to get the most it can from its scarce
resources and attempts to distribute the benefits of those resources to the
members of society in a fair manner
opportunity cost of going to college - Answer✔️✔️-the value of the best
opportunity a student gives up to attend college
rational decision making - Answer✔️✔️-marginal benefit greater than
marginal cost
incentive - Answer✔️✔️-economists understand that people respond to
________
invisible hand - Answer✔️✔️-A phrase coined by Adam Smith to describe
the process that turns self-directed gain into desirable market outcomes
Property rights - Answer✔️✔️-for markets to work well, there must be _____
market failure - Answer✔️✔️-a situation in which a market left on its own
fails to allocate resources efficiently
1
, ©SOPHIABENNETT@2024-2025 Monday, August 26, 2024 6:09 AM
Microeconomics - Answer✔️✔️-the study of how households and firms
make decisions and how they interact in markets
Macroeconomics - Answer✔️✔️-the study of the economy as a whole,
including topics such as inflation, unemployment, and economic growth
example of microeconomics - Answer✔️✔️-impact of minimum wage laws
on employment in the fast-food industry
example of macroeconomics - Answer✔️✔️-impact of faster money growth
on the rate of inflation
Benefits of Trade - Answer✔️✔️-1. for a more efficient use of resources
therefore allows a country to consume at a point outside its production
possibility frontier
2.for goods to be obtained at a lower opportunity cost
3. people to specialize in activities in which they have a comparative
advantage
4. for a greater variety of goods and services
comparative advantage - Answer✔️✔️-the ability to produce a good at a
lower opportunity cost than another producer
absolute advantage - Answer✔️✔️-the ability to produce a good using fewer
inputs than another producer
2
, ©SOPHIABENNETT@2024-2025 Monday, August 26, 2024 6:09 AM
opportunity cost - Answer✔️✔️-whatever must be given up to obtain some
item
In market economies, prices... - Answer✔️✔️-1. guide economic decisions
and thereby allocate scarce resources
2. ensure that quantity supplied and quantity demanded move towards
balance
3. influence how much a good buyers will choose to purchase and how
much sellers will choose to produce
Which points represent efficient production? - Answer✔️✔️-A, B, C - these
are along the PPC (production possibility curve)
Which points represent inefficient production? - Answer✔️✔️-C - this is
below the PPC (production possibility curve)
shifts in the demand curve - Answer✔️✔️-changes in income, prices of
related goods, tastes, expectations, number of buyers
shifts in supply curve - Answer✔️✔️-changes in input prices, technology,
expectations, number of sellers
Why does the supply curve slope upward? - Answer✔️✔️-Suppliers are
generally willing to offer more goods and services at a higher price and
fewer at a lower price (law of supply)
3
ECON 211 - Final Exam Study Guide with
Complete Solutions
Economics - Answer✔️✔️-the study of how society manages its scarce
resources
efficiency and equity - Answer✔️✔️-There is often a trade-off between
______________ ; society tries to get the most it can from its scarce
resources and attempts to distribute the benefits of those resources to the
members of society in a fair manner
opportunity cost of going to college - Answer✔️✔️-the value of the best
opportunity a student gives up to attend college
rational decision making - Answer✔️✔️-marginal benefit greater than
marginal cost
incentive - Answer✔️✔️-economists understand that people respond to
________
invisible hand - Answer✔️✔️-A phrase coined by Adam Smith to describe
the process that turns self-directed gain into desirable market outcomes
Property rights - Answer✔️✔️-for markets to work well, there must be _____
market failure - Answer✔️✔️-a situation in which a market left on its own
fails to allocate resources efficiently
1
, ©SOPHIABENNETT@2024-2025 Monday, August 26, 2024 6:09 AM
Microeconomics - Answer✔️✔️-the study of how households and firms
make decisions and how they interact in markets
Macroeconomics - Answer✔️✔️-the study of the economy as a whole,
including topics such as inflation, unemployment, and economic growth
example of microeconomics - Answer✔️✔️-impact of minimum wage laws
on employment in the fast-food industry
example of macroeconomics - Answer✔️✔️-impact of faster money growth
on the rate of inflation
Benefits of Trade - Answer✔️✔️-1. for a more efficient use of resources
therefore allows a country to consume at a point outside its production
possibility frontier
2.for goods to be obtained at a lower opportunity cost
3. people to specialize in activities in which they have a comparative
advantage
4. for a greater variety of goods and services
comparative advantage - Answer✔️✔️-the ability to produce a good at a
lower opportunity cost than another producer
absolute advantage - Answer✔️✔️-the ability to produce a good using fewer
inputs than another producer
2
, ©SOPHIABENNETT@2024-2025 Monday, August 26, 2024 6:09 AM
opportunity cost - Answer✔️✔️-whatever must be given up to obtain some
item
In market economies, prices... - Answer✔️✔️-1. guide economic decisions
and thereby allocate scarce resources
2. ensure that quantity supplied and quantity demanded move towards
balance
3. influence how much a good buyers will choose to purchase and how
much sellers will choose to produce
Which points represent efficient production? - Answer✔️✔️-A, B, C - these
are along the PPC (production possibility curve)
Which points represent inefficient production? - Answer✔️✔️-C - this is
below the PPC (production possibility curve)
shifts in the demand curve - Answer✔️✔️-changes in income, prices of
related goods, tastes, expectations, number of buyers
shifts in supply curve - Answer✔️✔️-changes in input prices, technology,
expectations, number of sellers
Why does the supply curve slope upward? - Answer✔️✔️-Suppliers are
generally willing to offer more goods and services at a higher price and
fewer at a lower price (law of supply)
3
