ECN Exam 1 MindTap Study Guide Part 1 2026 | Economics Review, Practice
Questions & Test Prep
Scarcity - ✔✔Limited resources and unlimited wants
Explain the classic trade-off between "guns and butter" - ✔✔If society spends more on
national defense (guns) then they will have less to spend on social programs (butter)
Explain why specialization and trade improve people's choices - ✔✔
Explain the source of large and persistent inflation - ✔✔
Marginal Costs - ✔✔
Marginal Benefits - ✔✔
Principle 1 - ✔✔People Face Trade Offs
Principle 2 - ✔✔The cost of something is what you give up to get 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 activity
Principle 7 - ✔✔Governments can sometimes improve market outcomes
Principle 8 - ✔✔A country's standard of living depends on it's ability to produce goods and
services
Principle 9 - ✔✔Prices rise when the government prints too much money
Principle 10 - ✔✔Society faces a short run of trade offs between inflation and unemployment
Economics - ✔✔Study of how society manages its scarce resources
Efficiency - ✔✔The property of society getting the most from its scarce resources
Equality - ✔✔The property of distributing economic prosperity uniformly among society's
members
Opportunity Cost - ✔✔Whatever is given up to get something else
Rational People - ✔✔Systematically and purposefully doing the best you can to achieve your
objectives
Marginal Change - ✔✔An incremental adjustment to an existing plan
Incentive - ✔✔Something that induces a person to act
Questions & Test Prep
Scarcity - ✔✔Limited resources and unlimited wants
Explain the classic trade-off between "guns and butter" - ✔✔If society spends more on
national defense (guns) then they will have less to spend on social programs (butter)
Explain why specialization and trade improve people's choices - ✔✔
Explain the source of large and persistent inflation - ✔✔
Marginal Costs - ✔✔
Marginal Benefits - ✔✔
Principle 1 - ✔✔People Face Trade Offs
Principle 2 - ✔✔The cost of something is what you give up to get 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 activity
Principle 7 - ✔✔Governments can sometimes improve market outcomes
Principle 8 - ✔✔A country's standard of living depends on it's ability to produce goods and
services
Principle 9 - ✔✔Prices rise when the government prints too much money
Principle 10 - ✔✔Society faces a short run of trade offs between inflation and unemployment
Economics - ✔✔Study of how society manages its scarce resources
Efficiency - ✔✔The property of society getting the most from its scarce resources
Equality - ✔✔The property of distributing economic prosperity uniformly among society's
members
Opportunity Cost - ✔✔Whatever is given up to get something else
Rational People - ✔✔Systematically and purposefully doing the best you can to achieve your
objectives
Marginal Change - ✔✔An incremental adjustment to an existing plan
Incentive - ✔✔Something that induces a person to act
