Macroeconomics: Quiz 1 prep(Correct answers)
What is the dollar back by? correct answers Supply and demand.
What is economics? correct answers It is the study of the choices people make given the scarcity
of resources. ____ is the science of how individuals and societies deal with the fact that wants
are greater than the limited resources available to satisfy those wants.
What is scarcity? correct answers "I don't have everything I want."
What is poverty? correct answers "I don't have everything I need."
What are some effects of scarcity? correct answers 1. need to make choices
2. need for a rationing device (ex: dollar price)
3. competition
What are resources (aka factors or inputs)? correct answers ____ are things we use to produce
things we want.
What are the 4 major categories of resources? correct answers 1. Land
2. Labor
3. Capital
* including human capital (human known-how)
4. Entrepreneurship ability
WhY must we make choice? correct answers Because the production of anything will require
scarce resources. There are not enough resources to meet our wants.
What is the economic problem? correct answers We have unlimited wants and limited resources.
How can we better address the problem of limited resources? correct answers More resources
(more people) the better we can address the basic economic problem.
What do economists study? correct answers 1. The benefits and costs of choices, i.e. choices
under conditions of scarcity.
2. Incentives: they have expected and unexpected results.
3. Study marginal benefits and costs to understand behavior.
What are some methods that economists use to study economics? correct answers 1. positive vs.
normative analysis
2. economic models (math, graphs, & equations)
3. marginal alaysis
What is positive analysis? correct answers A form of analysis that you can test empirically (with
numbers or a study).
What is the dollar back by? correct answers Supply and demand.
What is economics? correct answers It is the study of the choices people make given the scarcity
of resources. ____ is the science of how individuals and societies deal with the fact that wants
are greater than the limited resources available to satisfy those wants.
What is scarcity? correct answers "I don't have everything I want."
What is poverty? correct answers "I don't have everything I need."
What are some effects of scarcity? correct answers 1. need to make choices
2. need for a rationing device (ex: dollar price)
3. competition
What are resources (aka factors or inputs)? correct answers ____ are things we use to produce
things we want.
What are the 4 major categories of resources? correct answers 1. Land
2. Labor
3. Capital
* including human capital (human known-how)
4. Entrepreneurship ability
WhY must we make choice? correct answers Because the production of anything will require
scarce resources. There are not enough resources to meet our wants.
What is the economic problem? correct answers We have unlimited wants and limited resources.
How can we better address the problem of limited resources? correct answers More resources
(more people) the better we can address the basic economic problem.
What do economists study? correct answers 1. The benefits and costs of choices, i.e. choices
under conditions of scarcity.
2. Incentives: they have expected and unexpected results.
3. Study marginal benefits and costs to understand behavior.
What are some methods that economists use to study economics? correct answers 1. positive vs.
normative analysis
2. economic models (math, graphs, & equations)
3. marginal alaysis
What is positive analysis? correct answers A form of analysis that you can test empirically (with
numbers or a study).
