ECON-211: Exam #1 Study Guide with Complete Solutions

ECON-211: Exam #1 Study Guide with Complete Solutions Economics - Answer️️ -social science concerned with using scarce resources to obtain the maximum satisfaction of the unlimited material wants of society 3 features of economics - Answer️️ -#1 Scarcity and Choice #2 Purposeful Behavior #3 Marginal benefits & costs Scarcity is the conflict between - Answer️️ -relatively unlimited wants vs relatively limited resources Scarcity - Answer️️ -restricts options and demands choices (forces people to make a choice) Opportunity cost - Answer️️ -to obtain more of one thing, society forgoes the opportunity of getting the next best thing (cost is the value of the next best alternative that was not chosen) Utility - Answer️️ -the pleasure, happiness, or satisfaction obtained from consuming a good or service Purposeful behavior - Answer️️ -people make designs with some desired outcome in mind ©SOPHIABENNETT@ Monday, August 26, 2024 6:09 AM 2 Marginal analysis - Answer️️ -comparisons of marginal benefits and marginal costs, usually for decision making Marginal - Answer️️ -extra, additional, change in Economic principle - Answer️️ -statement about economic behavior or the economy that enables prediction of the probable effects of certain actions Purposeful simplifications - Answer️️ -theories, principles and models Generalizations - Answer️️ -economic principles are _____ relating to economic behavior or the economy itself Other-things-equal assumptions - Answer️️ -the assumption that factors other than those being considered do not change Graphical expression - Answer️️ -the way economist express many findings Microeconomics - Answer️️ -decision making by individual customers, workers, household and business firms Macroeconomics - Answer️️ -examine the performance and behavior of the economy as a whole Rational self-interest - Answer️️ --Allocate resources to maximize satisfaction or utility -Weigh the benefits and costs ©SOPHIABENNETT@ Monday, August 26, 2024 6:09 AM 3 Scientific Method - Answer️️ --Observe facts & behavior -Form a hypothesis -Test a hypothesis -Develop an economic theory based on favorable results Economic Theory - Answer️️ -Generalizations about how people behave or economy works Aggregate - Answer️️ -collection of a specific economic units treated as they were one Economic Policy - Answer️️ --Course of action based on economic theories -Policies to help achieve economic goal(s). Macroeconomic Goals - Answer️️ --Economic growth -Full employment -Control inflation Positive Economics - Answer️️ --Use the scientific method to explain what is or why it is -Study cause and effect Normative Economics - Answer️️ --Is an opinion or value judgment ©SOPHIABENNETT@ Monday, August 26, 2024 6:09 AM 4 of what should or ought to be -Supports an economic policy Economizing problem - Answer️️ -need to make choices because economic wants exceed economic means Budget line - Answer️️ -schedule or curve that shows various combinations of two products a consumer can purchase with a specific money income Land - Answer️️ -all natural resources used in the production process Labor - Answer️️ -physical actions and mental activities that people contribute to the production of goods and servic