Microeconomics Exam 1 Chapters 1-4
2025 With 100% Correct Answers
Economics - CORRECT ANSWER✔✔the choices we make when there is scarcity it is all about
trade-offs
scarcity - CORRECT ANSWER✔✔the resources we use to produce goods and services are limited
3 key economics questions - CORRECT ANSWER✔✔What products do we produce?
How do we produce the products?
Who consumes the product?
Factors of production (5) - CORRECT ANSWER✔✔Natural resources
Labor
Physical capital
Human capital
Entrepreneurship
HUMAN capital - CORRECT ANSWER✔✔the knowledge and skills acquired by a worker through
education and experience and used to price goods and services
Physical capital - CORRECT ANSWER✔✔the stock of equipment, machines, structures, and
infrastructure that is used to produce goods and services
Entrepreneurship - CORRECT ANSWER✔✔the effort used to coordinate the factors of
production; to produce and sell products
, Natural resources - CORRECT ANSWER✔✔resources provided by nature and used to produce
goods and services
Labor - CORRECT ANSWER✔✔human effort, including physical and mental, used to produce
goods and services
Positive analysis - CORRECT ANSWER✔✔Answers question, what is?, what will be?
Normative analysis - CORRECT ANSWER✔✔Answers the question, what ought to be?
Marginal change - CORRECT ANSWER✔✔A small one unit change in value
An unemployed individual decided to spend the day at the yacht club. The opportunity cost of
this is: - CORRECT ANSWER✔✔Cost of bait, any other monetary expenses, and the value of the
best alternative use of the person's time
opportunity cost - CORRECT ANSWER✔✔what you sacrifice to get something
School is 24,000 per year and you spend 8,000 per year on room and board. If you were working
full time, you could earn $30,000 per year. What is the opportunity cost for attending school for
a year? - CORRECT ANSWER✔✔54,000
If the economy is fully utilizing its resources, it can produce more of one product only if it: -
CORRECT ANSWER✔✔produces less of another product
Production possibilities curve - CORRECT ANSWER✔✔(PPF) curve that shows the possible
combinations of products that an economy can produce, given that its productive resources are
fully employed and efficiently used
2025 With 100% Correct Answers
Economics - CORRECT ANSWER✔✔the choices we make when there is scarcity it is all about
trade-offs
scarcity - CORRECT ANSWER✔✔the resources we use to produce goods and services are limited
3 key economics questions - CORRECT ANSWER✔✔What products do we produce?
How do we produce the products?
Who consumes the product?
Factors of production (5) - CORRECT ANSWER✔✔Natural resources
Labor
Physical capital
Human capital
Entrepreneurship
HUMAN capital - CORRECT ANSWER✔✔the knowledge and skills acquired by a worker through
education and experience and used to price goods and services
Physical capital - CORRECT ANSWER✔✔the stock of equipment, machines, structures, and
infrastructure that is used to produce goods and services
Entrepreneurship - CORRECT ANSWER✔✔the effort used to coordinate the factors of
production; to produce and sell products
, Natural resources - CORRECT ANSWER✔✔resources provided by nature and used to produce
goods and services
Labor - CORRECT ANSWER✔✔human effort, including physical and mental, used to produce
goods and services
Positive analysis - CORRECT ANSWER✔✔Answers question, what is?, what will be?
Normative analysis - CORRECT ANSWER✔✔Answers the question, what ought to be?
Marginal change - CORRECT ANSWER✔✔A small one unit change in value
An unemployed individual decided to spend the day at the yacht club. The opportunity cost of
this is: - CORRECT ANSWER✔✔Cost of bait, any other monetary expenses, and the value of the
best alternative use of the person's time
opportunity cost - CORRECT ANSWER✔✔what you sacrifice to get something
School is 24,000 per year and you spend 8,000 per year on room and board. If you were working
full time, you could earn $30,000 per year. What is the opportunity cost for attending school for
a year? - CORRECT ANSWER✔✔54,000
If the economy is fully utilizing its resources, it can produce more of one product only if it: -
CORRECT ANSWER✔✔produces less of another product
Production possibilities curve - CORRECT ANSWER✔✔(PPF) curve that shows the possible
combinations of products that an economy can produce, given that its productive resources are
fully employed and efficiently used
