ASU ECN 212 Exam 3 Final Questions
With 100% Solved Solutions 2026-2027
Set.
Economics - Answer -the study of how society manages its scarce resources and our unlimited
wants
-about how people interact with one and another and make decisions
-the role of scarcity
Microeconomics - Answer -the study of how households and firms make decisions and how
they interact in specific markets
-relates to our everyday lives
-how buyers and sellers interact with each other
Macroeconomics - Answer -studies the forces and trends that affect the economy as a whole
-looks at economy-wide phenomena including inflation, unemployment, economic growth, etc.
Scarcity - Answer -the limited nature of society's resources
-forces people to choose amoung available alternatives
Resources - Answer land, labor, capital, time, entrepreneurship
Rational People - Answer -systematically and purposefully do their best to achieve their
objectives
-take action on decisions only if the benefits out weigh the costs
-compare marginal benefits and marginal costs
Thinking on the Margin - Answer -changes behavior a little bit (up/down) based on self-
interest
-ex. driving on the freeway- time is valuable, but a ticket is expensive (speed when you don't see
cops, slow down when you see them)
-the process of deciding whether to do or use one additional unit of some resource
-rational people do this
Marginal Change - Answer a small incremental adjustment to an existing plan of action
, Marginal Benefit < Marginal Cost - Answer rational people would not make this decision if this
was the outcome
Marginal Benefit > Marginal Cost - Answer rational people would make this decision if this was
the outcome
Trade off - Answer -all the alternatives you give up in order to get something else since we
have limited resources
-ex. trade off for not coming to class- relaxing, working, going out with friends, etc.
Opportunity Cost - Answer -is the foregone value of the next highest value of the next highest
valued alternative
-the relevant cost for decision making
-compares the costs and benefits of alternative choices
-what makes people think on the margin
Opportunity Cost Example - Answer -going to work or to class:
must weigh the cost of foregone wages vs. the cost of not going to class and not learning
Self Interest - Answer individuals make decisions that are in their own best interest
Incentives - Answer rewards and penalties that motivate behavior
Social Interest - Answer choices are made that benefit society as a whole
Assumptions of Production Possibilities Curve (PPC) - Answer -fixed amount of resources (land,
labor, capital)
-set state of technology
-resources are fully employeed (including labor)
Production Possibilities Schedule - Answer lists the different possible combinations of two
goods that can be produced if all available resources are being employed
Production Possibilities Curve (PPC) - Answer -a model that shows alternative ways that an
economy can use its scarce resources
-each point represents a specific combination of goods that can be produced give full
employment
With 100% Solved Solutions 2026-2027
Set.
Economics - Answer -the study of how society manages its scarce resources and our unlimited
wants
-about how people interact with one and another and make decisions
-the role of scarcity
Microeconomics - Answer -the study of how households and firms make decisions and how
they interact in specific markets
-relates to our everyday lives
-how buyers and sellers interact with each other
Macroeconomics - Answer -studies the forces and trends that affect the economy as a whole
-looks at economy-wide phenomena including inflation, unemployment, economic growth, etc.
Scarcity - Answer -the limited nature of society's resources
-forces people to choose amoung available alternatives
Resources - Answer land, labor, capital, time, entrepreneurship
Rational People - Answer -systematically and purposefully do their best to achieve their
objectives
-take action on decisions only if the benefits out weigh the costs
-compare marginal benefits and marginal costs
Thinking on the Margin - Answer -changes behavior a little bit (up/down) based on self-
interest
-ex. driving on the freeway- time is valuable, but a ticket is expensive (speed when you don't see
cops, slow down when you see them)
-the process of deciding whether to do or use one additional unit of some resource
-rational people do this
Marginal Change - Answer a small incremental adjustment to an existing plan of action
, Marginal Benefit < Marginal Cost - Answer rational people would not make this decision if this
was the outcome
Marginal Benefit > Marginal Cost - Answer rational people would make this decision if this was
the outcome
Trade off - Answer -all the alternatives you give up in order to get something else since we
have limited resources
-ex. trade off for not coming to class- relaxing, working, going out with friends, etc.
Opportunity Cost - Answer -is the foregone value of the next highest value of the next highest
valued alternative
-the relevant cost for decision making
-compares the costs and benefits of alternative choices
-what makes people think on the margin
Opportunity Cost Example - Answer -going to work or to class:
must weigh the cost of foregone wages vs. the cost of not going to class and not learning
Self Interest - Answer individuals make decisions that are in their own best interest
Incentives - Answer rewards and penalties that motivate behavior
Social Interest - Answer choices are made that benefit society as a whole
Assumptions of Production Possibilities Curve (PPC) - Answer -fixed amount of resources (land,
labor, capital)
-set state of technology
-resources are fully employeed (including labor)
Production Possibilities Schedule - Answer lists the different possible combinations of two
goods that can be produced if all available resources are being employed
Production Possibilities Curve (PPC) - Answer -a model that shows alternative ways that an
economy can use its scarce resources
-each point represents a specific combination of goods that can be produced give full
employment
