ECN 212 EXAM 1Test Questions with
Solved Solutions 2026-2027 Updated.
incentives - Answer rewards and penalties that motivate behavior
-focus on what will entice them to do something (cause and effect)
good institutions align __ with __ - Answer self-interests with social interest
we cannot buy everything, which forces us to - Answer ration our spending
we cannot do everything we want, which forces us to - Answer ration our time
scarcity - Answer the availability of resources is insufficient for individuals to satisfy all desires
at zero price
*forces us to make decisions and choose among available alternatives
absence of scarcity - Answer implies that all of our desires for goods are fully satisfied
price - Answer used to ration goods and resources in a market setting
market organization (capitalism) - Answer a method of organization that allows for
unregulated prices and the decentralized decisions of private property owners to resolve the
basic economic problems
market - Answer the interaction between all of the potential buyers and sellers of good or
service
economize - Answer individuals _______, meaning they gain a specific benefit at the least
possible cost
rational behavior - Answer behavior is based on a careful, deliberate process that
weighs expected benefits and costs.
People do not make decisions that
make themselves worse of.
, subjective - Answer the value of goods is _____, meaning that goods (and services) are
appreciated in very different ways by different people
Information - Answer ______ is helpful but not free
the process of gathering it is not costless;
it is scarce
opportunity cost - Answer requires us to look at the full cost of making choices, including the
value of the next best alternative.
explicit costs - Answer money used in the pursuit of a goal that could otherwise have been
spent on an alternative objective.
implicit costs - Answer costs associated with the individual's use of his or her own time and
other resources (aka "opportunity cost").
economic cost - Answer the combination of explicit costs and implicit costs - the cost of all
resources used to produce the good
accounting costs - Answer costs reported in companies' net income statements
generated by accountants
sunk costs - Answer costs that have already been incurred and are beyond recovery
normative analysis - Answer when we let our opinion into our analysis - "what should or ought
to be." It becomes objective - belongs to the mind of the subject
positive analysis - Answer being able to describe what is around us - "what is. "(not influenced
by personal feelings) This is objective
theories - Answer judged first and foremost on their ability to predict future consequences of
economic action
they are attempts to discover the principles that drive the world (need confirmation but no
justification)
can help us understand the concept of
causation
Solved Solutions 2026-2027 Updated.
incentives - Answer rewards and penalties that motivate behavior
-focus on what will entice them to do something (cause and effect)
good institutions align __ with __ - Answer self-interests with social interest
we cannot buy everything, which forces us to - Answer ration our spending
we cannot do everything we want, which forces us to - Answer ration our time
scarcity - Answer the availability of resources is insufficient for individuals to satisfy all desires
at zero price
*forces us to make decisions and choose among available alternatives
absence of scarcity - Answer implies that all of our desires for goods are fully satisfied
price - Answer used to ration goods and resources in a market setting
market organization (capitalism) - Answer a method of organization that allows for
unregulated prices and the decentralized decisions of private property owners to resolve the
basic economic problems
market - Answer the interaction between all of the potential buyers and sellers of good or
service
economize - Answer individuals _______, meaning they gain a specific benefit at the least
possible cost
rational behavior - Answer behavior is based on a careful, deliberate process that
weighs expected benefits and costs.
People do not make decisions that
make themselves worse of.
, subjective - Answer the value of goods is _____, meaning that goods (and services) are
appreciated in very different ways by different people
Information - Answer ______ is helpful but not free
the process of gathering it is not costless;
it is scarce
opportunity cost - Answer requires us to look at the full cost of making choices, including the
value of the next best alternative.
explicit costs - Answer money used in the pursuit of a goal that could otherwise have been
spent on an alternative objective.
implicit costs - Answer costs associated with the individual's use of his or her own time and
other resources (aka "opportunity cost").
economic cost - Answer the combination of explicit costs and implicit costs - the cost of all
resources used to produce the good
accounting costs - Answer costs reported in companies' net income statements
generated by accountants
sunk costs - Answer costs that have already been incurred and are beyond recovery
normative analysis - Answer when we let our opinion into our analysis - "what should or ought
to be." It becomes objective - belongs to the mind of the subject
positive analysis - Answer being able to describe what is around us - "what is. "(not influenced
by personal feelings) This is objective
theories - Answer judged first and foremost on their ability to predict future consequences of
economic action
they are attempts to discover the principles that drive the world (need confirmation but no
justification)
can help us understand the concept of
causation
