Econ-102-PSU-Exam-1 update 2024
Incentives - ANSWERSrewards or penalties for engaging in a particular activity
Economics - ANSWERSThe study of how people allocate their limited resources to
satisfy their unlimited wants
Resources - ANSWERSthings used to produce goods and services to satisfy people's
wants
Wants - ANSWERSwhat people would buy if their incomes were unlimited
Microeconomics - ANSWERSthe study of decision making undertaken by individuals
and by firms
Macroeconomics - ANSWERSthe study of the behavior of the economy as a whole,
including such economy wide phenomena as changes in unemployment the general
price level, and national income.
Aggregates - ANSWERStotal amounts or quantities.
Rationality Assumption - ANSWERSThe assumption that people do not intentionally
make decisions that would leave them worse off
Models or theories - ANSWERSSimplified representatives of the real world used as the
basis for predictions or explanations
Ceteris paribus assumption - ANSWERSThe assumption that nothing changes except
the factor factors being studied
Empirical - ANSWERSRelying on real-world data in evaluation the usefulness of a
model
Behavioral Economics - ANSWERSAn approach to the study of consumer behavior
that emphasizes psychological limitations interfere with rational decision making
Bounded Rationality - ANSWERSThe hypothesis that people are nearly, but not fully,
rational, sot hat they can't examine every possible choice available to them but instead
use simple rules of thumb to sort among the alternatives that happen to occur to them
Positive Economics - ANSWERSAnalysis that is strictly limited to making either purely
descriptive statements or scientific predictions; for example, "If A, then B." A statement
of WHAT IS.
Incentives - ANSWERSrewards or penalties for engaging in a particular activity
Economics - ANSWERSThe study of how people allocate their limited resources to
satisfy their unlimited wants
Resources - ANSWERSthings used to produce goods and services to satisfy people's
wants
Wants - ANSWERSwhat people would buy if their incomes were unlimited
Microeconomics - ANSWERSthe study of decision making undertaken by individuals
and by firms
Macroeconomics - ANSWERSthe study of the behavior of the economy as a whole,
including such economy wide phenomena as changes in unemployment the general
price level, and national income.
Aggregates - ANSWERStotal amounts or quantities.
Rationality Assumption - ANSWERSThe assumption that people do not intentionally
make decisions that would leave them worse off
Models or theories - ANSWERSSimplified representatives of the real world used as the
basis for predictions or explanations
Ceteris paribus assumption - ANSWERSThe assumption that nothing changes except
the factor factors being studied
Empirical - ANSWERSRelying on real-world data in evaluation the usefulness of a
model
Behavioral Economics - ANSWERSAn approach to the study of consumer behavior
that emphasizes psychological limitations interfere with rational decision making
Bounded Rationality - ANSWERSThe hypothesis that people are nearly, but not fully,
rational, sot hat they can't examine every possible choice available to them but instead
use simple rules of thumb to sort among the alternatives that happen to occur to them
Positive Economics - ANSWERSAnalysis that is strictly limited to making either purely
descriptive statements or scientific predictions; for example, "If A, then B." A statement
of WHAT IS.
