ECN 211 MIDTERM 1 2026 REVISION NOTES
AND STRUCTURED ECONOMICS OVERVIEW
GUIDE
◉ Equality. Answer: that benefits are distributed uniformly among
society's members or how the pie is divided into individual slices
◉ Productivity. Answer: the amount of goods and services produced
from each unit of labor input
◉ Incentives. Answer: something that induces a person to act or
change a behavior
◉ Cost. Answer: money, time, activities, etc. you give up
◉ Opportunity Cost. Answer: whatever you give up to get something
else
◉ Marginal Benefit. Answer: the benefit/revenue of producing an
item or of a choice
◉ Marginal Thinking. Answer: if the benefits of your choice outway
the cost of it
, ◉ Marginal Cost. Answer: the cost of producing an item or of a
choice
◉ Trade-offs. Answer: -"There ain't no such thing as a free lunch."
-To get more of one thing we have to give up something else
-Guns and butter (defense or social programs)
◉ Trade-off between equality and efficiency. Answer: taxes and
welfare make us more equal but reduce incentives for hard work,
lowering total output
◉ Trade-off between inflation and unemployment. Answer: an
increase in the quantity of money stimulates spending, which raises
both prices and production
The increase in production requires more hiring, which reduces
unemployment.
an increase in inflation tends to reduce unemployment, causing a
trade-off between inflation and unemployment.
◉ Market Power. Answer: when an individual or group has the
power to substantially influence market prices
AND STRUCTURED ECONOMICS OVERVIEW
GUIDE
◉ Equality. Answer: that benefits are distributed uniformly among
society's members or how the pie is divided into individual slices
◉ Productivity. Answer: the amount of goods and services produced
from each unit of labor input
◉ Incentives. Answer: something that induces a person to act or
change a behavior
◉ Cost. Answer: money, time, activities, etc. you give up
◉ Opportunity Cost. Answer: whatever you give up to get something
else
◉ Marginal Benefit. Answer: the benefit/revenue of producing an
item or of a choice
◉ Marginal Thinking. Answer: if the benefits of your choice outway
the cost of it
, ◉ Marginal Cost. Answer: the cost of producing an item or of a
choice
◉ Trade-offs. Answer: -"There ain't no such thing as a free lunch."
-To get more of one thing we have to give up something else
-Guns and butter (defense or social programs)
◉ Trade-off between equality and efficiency. Answer: taxes and
welfare make us more equal but reduce incentives for hard work,
lowering total output
◉ Trade-off between inflation and unemployment. Answer: an
increase in the quantity of money stimulates spending, which raises
both prices and production
The increase in production requires more hiring, which reduces
unemployment.
an increase in inflation tends to reduce unemployment, causing a
trade-off between inflation and unemployment.
◉ Market Power. Answer: when an individual or group has the
power to substantially influence market prices
