ECON 202 CSU TEST 1 EXAM
QUESTIONS AND ANSWERS GRADED A+
2025/2026
Economic top 3 - ANS 1. WHAT to produce with our limited resources
2. HOW to produce the goods and services we select
3. FOR WHOM goods and services are produced - that is, who should get them
Scarcity - ANS lack of enough resources to saCsfy all desired uses of those resources
• Scarcity of resources limits the amount of goods and services that can be produced
Factor of Production - ANS resource inputs used to produce goods and services
ceteris paribus - ANS the assumption of nothing else changing
Macroeconomics - ANS The study of aggregate economic behavior, of the economy as a
whole
Microeconomics - ANS The study of individual behavior in the economy, of the components
of the larger economy
Positive analysis - ANS focuses on "what is"
based on facts
1 @COPYRIGHT 2025/2026 ALLRIGHTS RESERVED.
, Normative analysis - ANS focuses on "what should be"
based on opinions and judgments
Market Failure - ANS If the market does not produce the mix of goods that society desires...
• This provides an opening for government to step in
• If government can move us closer to the mix society
desires, the intervenCon is successful
Government Failure - ANS However, government can do the opposite, or impose such high
costs that a failure occurs
Mixed Market - ANS In general, the market is highly efficient
in producCon of many goods and services.....
.... but government maintains overall balance in the economy
Government Directive - ANS • Karl Marx and John Maynard Keynes advocated for
government intervenCon, but to different degrees
• Decisions about what, how, and for whom would be made by poliCcal leaders and bureaucrats
Market Mechanism: top 3 - ANS • WHAT to produce? Produce goods and services that
customers want
• HOW to produce? Profitably; produce goods and services while keeping producCon costs low
• FOR WHOM to produce? Produce for those who are both willing and able to pay for it
market mechanism - ANS the use of market prices and sales to signal desired outputs and
resource allocaCons
Economics - ANS is the study of how best to allocate scarce resources among competing
uses.
2 @COPYRIGHT 2025/2026 ALLRIGHTS RESERVED.
QUESTIONS AND ANSWERS GRADED A+
2025/2026
Economic top 3 - ANS 1. WHAT to produce with our limited resources
2. HOW to produce the goods and services we select
3. FOR WHOM goods and services are produced - that is, who should get them
Scarcity - ANS lack of enough resources to saCsfy all desired uses of those resources
• Scarcity of resources limits the amount of goods and services that can be produced
Factor of Production - ANS resource inputs used to produce goods and services
ceteris paribus - ANS the assumption of nothing else changing
Macroeconomics - ANS The study of aggregate economic behavior, of the economy as a
whole
Microeconomics - ANS The study of individual behavior in the economy, of the components
of the larger economy
Positive analysis - ANS focuses on "what is"
based on facts
1 @COPYRIGHT 2025/2026 ALLRIGHTS RESERVED.
, Normative analysis - ANS focuses on "what should be"
based on opinions and judgments
Market Failure - ANS If the market does not produce the mix of goods that society desires...
• This provides an opening for government to step in
• If government can move us closer to the mix society
desires, the intervenCon is successful
Government Failure - ANS However, government can do the opposite, or impose such high
costs that a failure occurs
Mixed Market - ANS In general, the market is highly efficient
in producCon of many goods and services.....
.... but government maintains overall balance in the economy
Government Directive - ANS • Karl Marx and John Maynard Keynes advocated for
government intervenCon, but to different degrees
• Decisions about what, how, and for whom would be made by poliCcal leaders and bureaucrats
Market Mechanism: top 3 - ANS • WHAT to produce? Produce goods and services that
customers want
• HOW to produce? Profitably; produce goods and services while keeping producCon costs low
• FOR WHOM to produce? Produce for those who are both willing and able to pay for it
market mechanism - ANS the use of market prices and sales to signal desired outputs and
resource allocaCons
Economics - ANS is the study of how best to allocate scarce resources among competing
uses.
2 @COPYRIGHT 2025/2026 ALLRIGHTS RESERVED.
