Microeconomics Test 1 Study Guide
and Microeconomics Self-Test
Questions & Answers ( Latest 2025 )
microeconomics - CORRECT ANSWERS ✅-the study
of how households and firms make decisions and how
they interact in markets
-small-scale level
macroeconomics - CORRECT ANSWERS ✅-the study
of the economy as a whole
-it focuses on inflation, unemployment and economic
growth
-large-scale level
Four Types of Resources - CORRECT ANSWERS
✅Land, Labor, Capital, and Entrepreneurial Ability
resource - CORRECT ANSWERS ✅Any item, whether
a gift of nature, the result of production, or the result of
human effort, that is used to produce goods and services.
Opportunity Cost - CORRECT ANSWERS ✅-The value
of the next best alternative
-The value of the opportunity given up when choosing
another opportunity
,Microeconomics Test 1 Study Guide
and Microeconomics Self-Test
Questions & Answers ( Latest 2025 )
Role of Incentives - CORRECT ANSWERS ✅-If a
behavior is rewarded, more of the behavior will be done
-If a behavior is penalized, less of the behavior will be
done
Types of Rational Decision Making - CORRECT ANSWERS
✅Self-Interest, Marginal Decision Making, Optimization
Self-Interest - CORRECT ANSWERS ✅one's own
personal gain
Marginal Decision Making - CORRECT ANSWERS
✅The process of making choices in increments by
evaluating the additional, or marginal, benefit against the
additional, or marginal, cost of an action.
Optimization - CORRECT ANSWERS ✅Idea that
people make choices in order to maximize the total
benefit
, Microeconomics Test 1 Study Guide
and Microeconomics Self-Test
Questions & Answers ( Latest 2025 )
Marginal Benefit - CORRECT ANSWERS ✅the
additional benefit associated with one more unit of an
activity
Marginal Cost - CORRECT ANSWERS ✅the additional
cost associated with one more unit of an activity
Decision Rule - CORRECT ANSWERS ✅Marginal
Benefit should be greater than/equal to Marginal Cost
Equilibrium Point - CORRECT ANSWERS ✅Where the
supply curve and the demand curve intersect
Explain how resources are combined to produce output -
CORRECT ANSWERS ✅
Absolute Advantage - CORRECT ANSWERS ✅the
ability to produce a good using fewer inputs than another
producer
Comparative Advantage - CORRECT ANSWERS ✅the
ability to produce a good at a lower opportunity cost than
another producer
and Microeconomics Self-Test
Questions & Answers ( Latest 2025 )
microeconomics - CORRECT ANSWERS ✅-the study
of how households and firms make decisions and how
they interact in markets
-small-scale level
macroeconomics - CORRECT ANSWERS ✅-the study
of the economy as a whole
-it focuses on inflation, unemployment and economic
growth
-large-scale level
Four Types of Resources - CORRECT ANSWERS
✅Land, Labor, Capital, and Entrepreneurial Ability
resource - CORRECT ANSWERS ✅Any item, whether
a gift of nature, the result of production, or the result of
human effort, that is used to produce goods and services.
Opportunity Cost - CORRECT ANSWERS ✅-The value
of the next best alternative
-The value of the opportunity given up when choosing
another opportunity
,Microeconomics Test 1 Study Guide
and Microeconomics Self-Test
Questions & Answers ( Latest 2025 )
Role of Incentives - CORRECT ANSWERS ✅-If a
behavior is rewarded, more of the behavior will be done
-If a behavior is penalized, less of the behavior will be
done
Types of Rational Decision Making - CORRECT ANSWERS
✅Self-Interest, Marginal Decision Making, Optimization
Self-Interest - CORRECT ANSWERS ✅one's own
personal gain
Marginal Decision Making - CORRECT ANSWERS
✅The process of making choices in increments by
evaluating the additional, or marginal, benefit against the
additional, or marginal, cost of an action.
Optimization - CORRECT ANSWERS ✅Idea that
people make choices in order to maximize the total
benefit
, Microeconomics Test 1 Study Guide
and Microeconomics Self-Test
Questions & Answers ( Latest 2025 )
Marginal Benefit - CORRECT ANSWERS ✅the
additional benefit associated with one more unit of an
activity
Marginal Cost - CORRECT ANSWERS ✅the additional
cost associated with one more unit of an activity
Decision Rule - CORRECT ANSWERS ✅Marginal
Benefit should be greater than/equal to Marginal Cost
Equilibrium Point - CORRECT ANSWERS ✅Where the
supply curve and the demand curve intersect
Explain how resources are combined to produce output -
CORRECT ANSWERS ✅
Absolute Advantage - CORRECT ANSWERS ✅the
ability to produce a good using fewer inputs than another
producer
Comparative Advantage - CORRECT ANSWERS ✅the
ability to produce a good at a lower opportunity cost than
another producer
