ECN 211 Exam 1 Review ASU Exam Questions
With Correct Answers
Ten |Principes |- |CORRECT |ANSWER✔✔-Principle |1: |People |face |tradeoffs
Principle |2: |The |cost |of |something |what |you |give |up |getting |it
Principle |3: |Rational |people |think |at |the |margin
Principle |4: |People |respond |to |incentives
Principle |5: |Trade |can |make |everyone |better |off
Principle |6: |Markets |are |usually |a |good |way |to |organize |economic
Principle |7: |Government |can |sometimes |improve |market |outcomes
Principle |8: |A |country's |standard |of |living |depends |on |its |ability |to |produce |goods |and |services
Principle |9: |Prices |rise |when |government |prints |too |much |money
Principle |10: |Society |faces |a |short-run |trade |off |between |inflation |and |unemployment
First |4 |principles |have |to |do |with |what? |- |CORRECT |ANSWER✔✔-How |people |make |descisions
What |do |the |last |4 |principles |have |to |do |with? |- |CORRECT |ANSWER✔✔-Productivity |are |the |
ultimate |source |of |living
Scarcity |- |CORRECT |ANSWER✔✔-The |limited |nature |of |society's |resources
Economics |- |CORRECT |ANSWER✔✔-The |study |of |how |society |manages |its |scarce |resources
The |economist |plays |2 |roles |- |CORRECT |ANSWER✔✔-Scientist: |Trying |to |explain |the |world
, Policy |Advisers: |Trying |to |improve |the |world
Circular-flow |diagram |is |what? |- |CORRECT |ANSWER✔✔-A |visual |model |of |the |economy, |slows |
how |dollars |and |goods |and |services |flow |through |markets |among |households |and |firms
Factors |of |production |are |defined |as? |and |what |are |some |examples? |- |CORRECT |ANSWER✔✔-
the |resources |the |economy |uses |to |produce |goods |and |services |including
1. |Labor
2. |Land |
3. |Capital |(buildings |and |machines |used |in |production)
Households |in |the |circular-flow |diagram |do |what? |- |CORRECT |ANSWER✔✔-1. |Own |the |factors |
of |production, |sell/rent |them |to |firms |for |income
2. |Buy |and |consume |goods |and |services
Firms |in |the |circular-flow |diagram |do |what? |- |CORRECT |ANSWER✔✔-1. |Buy/hire |factors |of |
production, |use |them |to |produce |goods |and |services
2. |Sell |goods |and |services |for |wages, |rent, |and |profit
PPF |is |a |graph |that... |- |CORRECT |ANSWER✔✔-shows |the |combinations |of |two |goods |the |
economy |can |possibly |produce |given |the |available |resources |and |the |available |technology
When |a |PPF |has |a |lower |slope |it |has |a... |- |CORRECT |ANSWER✔✔-lower |opportunity |cost
Market |is |a. |- |CORRECT |ANSWER✔✔-group |of |buyers |and |sellers
Buyer |behavior: |Demand |- |CORRECT |ANSWER✔✔-1. |Quantity |demanded |of |any |good |is |the |
amount |of |the |good |that |buyers |are |willing |and |able |to |purchase
With Correct Answers
Ten |Principes |- |CORRECT |ANSWER✔✔-Principle |1: |People |face |tradeoffs
Principle |2: |The |cost |of |something |what |you |give |up |getting |it
Principle |3: |Rational |people |think |at |the |margin
Principle |4: |People |respond |to |incentives
Principle |5: |Trade |can |make |everyone |better |off
Principle |6: |Markets |are |usually |a |good |way |to |organize |economic
Principle |7: |Government |can |sometimes |improve |market |outcomes
Principle |8: |A |country's |standard |of |living |depends |on |its |ability |to |produce |goods |and |services
Principle |9: |Prices |rise |when |government |prints |too |much |money
Principle |10: |Society |faces |a |short-run |trade |off |between |inflation |and |unemployment
First |4 |principles |have |to |do |with |what? |- |CORRECT |ANSWER✔✔-How |people |make |descisions
What |do |the |last |4 |principles |have |to |do |with? |- |CORRECT |ANSWER✔✔-Productivity |are |the |
ultimate |source |of |living
Scarcity |- |CORRECT |ANSWER✔✔-The |limited |nature |of |society's |resources
Economics |- |CORRECT |ANSWER✔✔-The |study |of |how |society |manages |its |scarce |resources
The |economist |plays |2 |roles |- |CORRECT |ANSWER✔✔-Scientist: |Trying |to |explain |the |world
, Policy |Advisers: |Trying |to |improve |the |world
Circular-flow |diagram |is |what? |- |CORRECT |ANSWER✔✔-A |visual |model |of |the |economy, |slows |
how |dollars |and |goods |and |services |flow |through |markets |among |households |and |firms
Factors |of |production |are |defined |as? |and |what |are |some |examples? |- |CORRECT |ANSWER✔✔-
the |resources |the |economy |uses |to |produce |goods |and |services |including
1. |Labor
2. |Land |
3. |Capital |(buildings |and |machines |used |in |production)
Households |in |the |circular-flow |diagram |do |what? |- |CORRECT |ANSWER✔✔-1. |Own |the |factors |
of |production, |sell/rent |them |to |firms |for |income
2. |Buy |and |consume |goods |and |services
Firms |in |the |circular-flow |diagram |do |what? |- |CORRECT |ANSWER✔✔-1. |Buy/hire |factors |of |
production, |use |them |to |produce |goods |and |services
2. |Sell |goods |and |services |for |wages, |rent, |and |profit
PPF |is |a |graph |that... |- |CORRECT |ANSWER✔✔-shows |the |combinations |of |two |goods |the |
economy |can |possibly |produce |given |the |available |resources |and |the |available |technology
When |a |PPF |has |a |lower |slope |it |has |a... |- |CORRECT |ANSWER✔✔-lower |opportunity |cost
Market |is |a. |- |CORRECT |ANSWER✔✔-group |of |buyers |and |sellers
Buyer |behavior: |Demand |- |CORRECT |ANSWER✔✔-1. |Quantity |demanded |of |any |good |is |the |
amount |of |the |good |that |buyers |are |willing |and |able |to |purchase
