KSU ECON 1000 EXAM 1 QUESTIONS &
ANSWERS 2024/2025
The analysis of aggregate decision-making and outcomes for society as a whole is known as: -
ANSWERSMacroeconomics
Identify the positive economic statement(s) below. - ANSWERSIf you raise the price of gas, people will
buy less gas.
*Prediction is the hallmark of positive economics.*
In order to make predictions, economists generally assume that individuals are: - ANSWERSRational and
self-interested.
The condition that human wants exceed the amount available from finite resources is known as: -
ANSWERSScarcity.
When individuals engage in voluntary trade, it means: - ANSWERSEach person values what he/she is
receiving more than what he/she is giving up.
AND
They are happier.
Money is useful for exchange because it is: - ANSWERSA medium of exchange.
A convenient unit of account.
A store of value.
simple transactions
, The law of demand states: - ANSWERSThere is a negative relationship between the price of a product
and the quantity consumers are willing
to buy.
What happens to the price and quantity of sandwiches when the price of bread increases? -
ANSWERSIncreased price, decreased quantity
What happens to the price and quantity of an inferior good when incomes rise? - ANSWERSDecreased
price, decreased quantity
What happens to the price and quantity of kale when the seller is subsidized for producing it? -
ANSWERSDecreased price, increased quantity
a postive statement: - ANSWERScan eventually be proven "right" or "wrong" by gathering enough data
and evidence.
normative statement: - ANSWERSa statement that aims to assess the desirability of how the world is or
functions, perhaps with suggestions of things that could be done to improve matters.
Microeconomics - ANSWERShe study of how individual decision maker behave and interact with each
other, often with a focus on how households and firms behave and interact
with each other in markets.
What assumptions do economists assume to be generally true about human beings and the world? -
ANSWERSpeople are self-interested
people are rational
we assume people make decision at the margin
resources are scarce
ANSWERS 2024/2025
The analysis of aggregate decision-making and outcomes for society as a whole is known as: -
ANSWERSMacroeconomics
Identify the positive economic statement(s) below. - ANSWERSIf you raise the price of gas, people will
buy less gas.
*Prediction is the hallmark of positive economics.*
In order to make predictions, economists generally assume that individuals are: - ANSWERSRational and
self-interested.
The condition that human wants exceed the amount available from finite resources is known as: -
ANSWERSScarcity.
When individuals engage in voluntary trade, it means: - ANSWERSEach person values what he/she is
receiving more than what he/she is giving up.
AND
They are happier.
Money is useful for exchange because it is: - ANSWERSA medium of exchange.
A convenient unit of account.
A store of value.
simple transactions
, The law of demand states: - ANSWERSThere is a negative relationship between the price of a product
and the quantity consumers are willing
to buy.
What happens to the price and quantity of sandwiches when the price of bread increases? -
ANSWERSIncreased price, decreased quantity
What happens to the price and quantity of an inferior good when incomes rise? - ANSWERSDecreased
price, decreased quantity
What happens to the price and quantity of kale when the seller is subsidized for producing it? -
ANSWERSDecreased price, increased quantity
a postive statement: - ANSWERScan eventually be proven "right" or "wrong" by gathering enough data
and evidence.
normative statement: - ANSWERSa statement that aims to assess the desirability of how the world is or
functions, perhaps with suggestions of things that could be done to improve matters.
Microeconomics - ANSWERShe study of how individual decision maker behave and interact with each
other, often with a focus on how households and firms behave and interact
with each other in markets.
What assumptions do economists assume to be generally true about human beings and the world? -
ANSWERSpeople are self-interested
people are rational
we assume people make decision at the margin
resources are scarce
