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principles of economics Questions and
Answers (100% Correct Answers) Already
Graded A+
What is economics? [ Ans: ] The study of how society manages
its scarce resources.
What are the three fundamental economic questions? [ Ans: ]
What to produce, how to produce, and who gets the output.
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What is scarcity? [ Ans: ] The limited nature of society's resources.
What is a trade-off? [ Ans: ] A decision that requires giving up
one thing to gain another.
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What is opportunity cost? [ Ans: ] The value of the next best
alternative that is forgone.
What does "thinking at the margin" mean? [ Ans: ] Making
decisions based on small incremental changes.
What is marginal cost? [ Ans: ] The cost of producing one more
unit of a good.
What is marginal benefit? [ Ans: ] The additional benefit from
consuming one more unit of a good.
What does it mean when people respond to incentives? [ Ans: ]
Their behavior changes when the costs or benefits change.
Why can trade make everyone better off? [ Ans: ] Because it
allows for specialization and increases total output.
What is a market economy? [ Ans: ] An economy where
decisions are made by numerous firms and households.
What is market failure? [ Ans: ] A situation where the market fails
to allocate resources efficiently.
, 2
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What is an externality? [ Ans: ] The impact of one person's
actions on a bystander.
What is market power? [ Ans: ] The ability of a single economic
actor to influence market prices.
What is microeconomics? [ Ans: ] The study of how households
and firms make decisions and interact.
What is macroeconomics? [ Ans: ] The study of economy-wide
phenomena like inflation and unemployment.
What is GDP per capita? [ Ans: ] The total output of a country
divided by its population.
What is inflation? [ Ans: ] An overall increase in the price level.
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What is the Philips Curve? [ Ans: ] Shows the short-run trade-off
between inflation and unemployment.
What is the neo-classical approach? [ Ans: ] A mainstream
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economic view emphasizing the role of markets.
What is empirical data? [ Ans: ] Information gathered through
observation, experience, or experiments.
What is falsifiability? [ Ans: ] The possibility that a theory can be
rejected with new evidence.
What is the difference between rationalism and empiricism? [
Ans: ] Rationalism uses reason and logic; empiricism relies on
observation.
What is an endogenous variable? [ Ans: ] A variable determined
within the model.
What is an exogenous variable? [ Ans: ] A variable determined
outside the model.
What is a positive statement? [ Ans: ] A claim that describes the
world as it is.
What is a normative statement? [ Ans: ] A claim that prescribes
how the world should be.
For Expert help and assignment solutions, +254707240657
principles of economics Questions and
Answers (100% Correct Answers) Already
Graded A+
What is economics? [ Ans: ] The study of how society manages
its scarce resources.
What are the three fundamental economic questions? [ Ans: ]
What to produce, how to produce, and who gets the output.
© 2025 Assignment Expert
What is scarcity? [ Ans: ] The limited nature of society's resources.
What is a trade-off? [ Ans: ] A decision that requires giving up
one thing to gain another.
Guru01 - Stuvia
What is opportunity cost? [ Ans: ] The value of the next best
alternative that is forgone.
What does "thinking at the margin" mean? [ Ans: ] Making
decisions based on small incremental changes.
What is marginal cost? [ Ans: ] The cost of producing one more
unit of a good.
What is marginal benefit? [ Ans: ] The additional benefit from
consuming one more unit of a good.
What does it mean when people respond to incentives? [ Ans: ]
Their behavior changes when the costs or benefits change.
Why can trade make everyone better off? [ Ans: ] Because it
allows for specialization and increases total output.
What is a market economy? [ Ans: ] An economy where
decisions are made by numerous firms and households.
What is market failure? [ Ans: ] A situation where the market fails
to allocate resources efficiently.
, 2
For Expert help and assignment solutions, +254707240657
What is an externality? [ Ans: ] The impact of one person's
actions on a bystander.
What is market power? [ Ans: ] The ability of a single economic
actor to influence market prices.
What is microeconomics? [ Ans: ] The study of how households
and firms make decisions and interact.
What is macroeconomics? [ Ans: ] The study of economy-wide
phenomena like inflation and unemployment.
What is GDP per capita? [ Ans: ] The total output of a country
divided by its population.
What is inflation? [ Ans: ] An overall increase in the price level.
© 2025 Assignment Expert
What is the Philips Curve? [ Ans: ] Shows the short-run trade-off
between inflation and unemployment.
What is the neo-classical approach? [ Ans: ] A mainstream
Guru01 - Stuvia
economic view emphasizing the role of markets.
What is empirical data? [ Ans: ] Information gathered through
observation, experience, or experiments.
What is falsifiability? [ Ans: ] The possibility that a theory can be
rejected with new evidence.
What is the difference between rationalism and empiricism? [
Ans: ] Rationalism uses reason and logic; empiricism relies on
observation.
What is an endogenous variable? [ Ans: ] A variable determined
within the model.
What is an exogenous variable? [ Ans: ] A variable determined
outside the model.
What is a positive statement? [ Ans: ] A claim that describes the
world as it is.
What is a normative statement? [ Ans: ] A claim that prescribes
how the world should be.
