EC 101 Exam1
Study of how people make choices under conditions of scarcity - Answer-Economics
Everything has a limit - Answer-Scarcity
True or False: Condition of scarcity means we have a limited amount of things but our wants are
unlimited. - Answer-True
Study of how individual actors make decisions. - Answer-microeconomics
How individual person, individual company, and individual industry make decisions. - Answer-
microeconomics
Study of how aggregated actors make decisions. - Answer-macroeconomics
Birds eye view of the entire economy. - Answer-macroeconomics
What is the key term in the old expression that there's no such thing as a free lunch? - Answer-
opportunity cost
What is the implicit cost of a free lunch? - Answer-time and energy spent to get the lunch
What is the explicit cost of a free lunch? - Answer-resources used to make that free lunch.
, The next best alternative. The forgone alternative. If we do one thing then we can't do another. -
Answer-opportunity cost
Holding all else constant. - Answer-ceteris paribus
What are the 3 assumptions that economists must make? - Answer-ceteris paribus, individuals act in
own self-interest, individuals are utility maximizers
when we analyze data we first think about (positive/normative) economics then we think about
(positive/normative) economics - Answer-positive, normative
Just the facts. - Answer-Positive economics
Value judgements. Think about what should be. - Answer-Normative economics
Positive or Normative Economics: Ex. People who go to high school take more sick days than those who
go to college. - Answer-Positive
Positive or Normative Economics: If college was free people would be healthier. - Answer-Normative
People have unlimited desire for goods and services but limited budget to spend. - Answer-scarcity
What is the economizing problem? - Answer-people have unlimited desire for goods and services but
limited budgets to spend
What do we use to explore the economizing problem? - Answer-budget constraint
Study of how people make choices under conditions of scarcity - Answer-Economics
Everything has a limit - Answer-Scarcity
True or False: Condition of scarcity means we have a limited amount of things but our wants are
unlimited. - Answer-True
Study of how individual actors make decisions. - Answer-microeconomics
How individual person, individual company, and individual industry make decisions. - Answer-
microeconomics
Study of how aggregated actors make decisions. - Answer-macroeconomics
Birds eye view of the entire economy. - Answer-macroeconomics
What is the key term in the old expression that there's no such thing as a free lunch? - Answer-
opportunity cost
What is the implicit cost of a free lunch? - Answer-time and energy spent to get the lunch
What is the explicit cost of a free lunch? - Answer-resources used to make that free lunch.
, The next best alternative. The forgone alternative. If we do one thing then we can't do another. -
Answer-opportunity cost
Holding all else constant. - Answer-ceteris paribus
What are the 3 assumptions that economists must make? - Answer-ceteris paribus, individuals act in
own self-interest, individuals are utility maximizers
when we analyze data we first think about (positive/normative) economics then we think about
(positive/normative) economics - Answer-positive, normative
Just the facts. - Answer-Positive economics
Value judgements. Think about what should be. - Answer-Normative economics
Positive or Normative Economics: Ex. People who go to high school take more sick days than those who
go to college. - Answer-Positive
Positive or Normative Economics: If college was free people would be healthier. - Answer-Normative
People have unlimited desire for goods and services but limited budget to spend. - Answer-scarcity
What is the economizing problem? - Answer-people have unlimited desire for goods and services but
limited budgets to spend
What do we use to explore the economizing problem? - Answer-budget constraint
