Economics; Chapters 1-6; Exam 1 Study
Guide Q & As (Verified Answers) 2026
Economics - Correct Answers ✅The study of how people
allocate their limited resources to satisfy their unlimited
wants.
Scarcity - Correct Answers ✅The most basic concept in all
of economics. Occurs when the ingredients for producing
things that people desire are insufficient to satisfy all wants.
Means we never have enough of everything, including time,
to satisfy our every desire
An increase in demand is represented by - Correct Answers
✅a rightward shift in the demand curve
Price Ceiling - Correct Answers ✅Legal maximum price
Major Economic effect of Medicare subsidies - Correct
Answers ✅Subsidies lead to a higher quantity of medical
services consumed. Medicare encourages people to consume
medical services that are low in per-unit value relative to the
cost
Situation: Family A earns $20,000 and pays $1,500 in income
taxes
Family B earns $40,000 and pays $3,500 in income taxes.
What kind of income tax system is this? - Correct Answers
✅Progressive Taxation
, Economics; Chapters 1-6; Exam 1 Study
Guide Q & As (Verified Answers) 2026
Economists assume that people behave - Correct Answers
✅as if motivated by self-interest and respond predictably to
opportunities for gain.
Macroeconomics is concerned with the study of - Correct
Answers ✅the behavior of the economy as a whole. It deals
with economy wide phenomena and aggregates, or totals
The way economists understand, explain, and predict
economic phenomenon is to - Correct Answers ✅build
models (graphs)
An economic theory is also known as an economic - Correct
Answers ✅model
Normative economic analysis tends to - Correct Answers
✅involve value judgments; relate to whether things are good
or bad; it is a statement of what ought to be.
When two variables have a direct relationship, the slope is -
Correct Answers ✅positive
Inverse relationship graphed is - Correct Answers
✅negatively sloped
Guide Q & As (Verified Answers) 2026
Economics - Correct Answers ✅The study of how people
allocate their limited resources to satisfy their unlimited
wants.
Scarcity - Correct Answers ✅The most basic concept in all
of economics. Occurs when the ingredients for producing
things that people desire are insufficient to satisfy all wants.
Means we never have enough of everything, including time,
to satisfy our every desire
An increase in demand is represented by - Correct Answers
✅a rightward shift in the demand curve
Price Ceiling - Correct Answers ✅Legal maximum price
Major Economic effect of Medicare subsidies - Correct
Answers ✅Subsidies lead to a higher quantity of medical
services consumed. Medicare encourages people to consume
medical services that are low in per-unit value relative to the
cost
Situation: Family A earns $20,000 and pays $1,500 in income
taxes
Family B earns $40,000 and pays $3,500 in income taxes.
What kind of income tax system is this? - Correct Answers
✅Progressive Taxation
, Economics; Chapters 1-6; Exam 1 Study
Guide Q & As (Verified Answers) 2026
Economists assume that people behave - Correct Answers
✅as if motivated by self-interest and respond predictably to
opportunities for gain.
Macroeconomics is concerned with the study of - Correct
Answers ✅the behavior of the economy as a whole. It deals
with economy wide phenomena and aggregates, or totals
The way economists understand, explain, and predict
economic phenomenon is to - Correct Answers ✅build
models (graphs)
An economic theory is also known as an economic - Correct
Answers ✅model
Normative economic analysis tends to - Correct Answers
✅involve value judgments; relate to whether things are good
or bad; it is a statement of what ought to be.
When two variables have a direct relationship, the slope is -
Correct Answers ✅positive
Inverse relationship graphed is - Correct Answers
✅negatively sloped
