ECN 211 FINAL PAPER 2026 QUESTIONS
AND SOLUTIONS 100% CORRECT
◉Explain why economics is a science. Answer: Economics is a social
science that utilizes the methods that are used in biology, chemistry,
and physics. The science of economics uses models to help explain
and predict outcomes. A model is a simplified version of reality. In
developing a model, assumptions must be made in order to define
the array of circumstances in which the model may be applied. The
simplest theory that can predict is the one that should be used.
◉Distinguish positive and normative economics.. Answer: The end
of Chapter 1 addresses the difference between positive and
normative economics. Positive economics is an analysis that is
limited to statements that are verifiable. Normative economics can
be identified by the use of the word should. Other words that
provide a flag that a normative statement, rather than a positive
statement, is being made are good, bad, best, desirable, undesirable,
better, and worse.
In Chapter 2, you will study scarcity and the trade-offs that are made
due to limited resources.
◉Evaluate whether even affluent people face the problem of
scarcity.. Answer: If you stop and think about it, things such as time,
, clean air, and sleep are limited. The idea of scarcity is fundamental to
the study of economics. Scarcity exists in all societies and at all
income levels because human wants exceed what can be produced
with the limited resources and time that nature makes available.
This, in turn, forces people to decide what and how much to
consume.
◉Understand why economics considers individuals' wants but not
their needs.. Answer: Needs are not objectively definable. Perhaps
the best way to view a need is as an absolute necessity required to
stay alive, such as food or water. Wants refer to desired goods and
are unlimited. Therefore, in studying economics, an individual's
wants are taken into consideration, rather than needs.
◉Explain why the scarcity problem induces people to consider
opportunity costs.. Answer: Scarcity of resources requires choices be
made. For example: Should you go to the movie or study for your
economics class for two hours? If you choose one, you cannot also do
the other due to the limited resource of time. When one choice is
made, another is given up. This brings you to opportunity cost,
which is the highest valued, next-best alternative that must be
sacrificed for the choice that was made. In economics, cost is always
a forgone opportunity. Marginal benefit and marginal cost, which
look at the incremental cost (benefit) associated with one additional
unit, help a consumer to make choices.
AND SOLUTIONS 100% CORRECT
◉Explain why economics is a science. Answer: Economics is a social
science that utilizes the methods that are used in biology, chemistry,
and physics. The science of economics uses models to help explain
and predict outcomes. A model is a simplified version of reality. In
developing a model, assumptions must be made in order to define
the array of circumstances in which the model may be applied. The
simplest theory that can predict is the one that should be used.
◉Distinguish positive and normative economics.. Answer: The end
of Chapter 1 addresses the difference between positive and
normative economics. Positive economics is an analysis that is
limited to statements that are verifiable. Normative economics can
be identified by the use of the word should. Other words that
provide a flag that a normative statement, rather than a positive
statement, is being made are good, bad, best, desirable, undesirable,
better, and worse.
In Chapter 2, you will study scarcity and the trade-offs that are made
due to limited resources.
◉Evaluate whether even affluent people face the problem of
scarcity.. Answer: If you stop and think about it, things such as time,
, clean air, and sleep are limited. The idea of scarcity is fundamental to
the study of economics. Scarcity exists in all societies and at all
income levels because human wants exceed what can be produced
with the limited resources and time that nature makes available.
This, in turn, forces people to decide what and how much to
consume.
◉Understand why economics considers individuals' wants but not
their needs.. Answer: Needs are not objectively definable. Perhaps
the best way to view a need is as an absolute necessity required to
stay alive, such as food or water. Wants refer to desired goods and
are unlimited. Therefore, in studying economics, an individual's
wants are taken into consideration, rather than needs.
◉Explain why the scarcity problem induces people to consider
opportunity costs.. Answer: Scarcity of resources requires choices be
made. For example: Should you go to the movie or study for your
economics class for two hours? If you choose one, you cannot also do
the other due to the limited resource of time. When one choice is
made, another is given up. This brings you to opportunity cost,
which is the highest valued, next-best alternative that must be
sacrificed for the choice that was made. In economics, cost is always
a forgone opportunity. Marginal benefit and marginal cost, which
look at the incremental cost (benefit) associated with one additional
unit, help a consumer to make choices.
