ECN 211 LATEST 2026 STUDY GUIDE QUESTIONS AND
SOLUTIONS GRADED A+
✔✔Micro - ✔✔A US software firm discharged 15 workers last month and transferred the
work to India.
✔✔Micro - ✔✔An unexpected freeze in central Florida reduced the citrus crop and
caused the price of oranges to rise.
✔✔Macro - ✔✔US output, adjusted for inflation, grew by 2.4 percent 2014.
✔✔Micro - ✔✔Last week Wells Fargo Bank lowered its interest rate on business loans
by one-half of 1 percentage point.
✔✔positive - ✔✔As scientists, economists make
_____________ statements,
which attempt to describe the world as it is.
✔✔normative - ✔✔As policy advisors, economists make
_______________ statements,
which attempt to prescribe how the world should be.
✔✔Positive , normative - ✔✔____________ statements can be confirmed or refuted,
_____________ statements cannot
✔✔Positive Economics - ✔✔the branch of economics that concerns the description and
explanation of economic phenomena. It focuses on facts and cause-and-effect
behavioral relationships and includes the development and testing of economics
theories.
✔✔Budget Line - ✔✔combination of two goods one can buy with a given money income
✔✔Production Possibilities Curve (PPC) - ✔✔a graph that shows the combinations of
two goods the economy can possibly produce given the available resources and the
available technology
✔✔Law of Increasing Opportunity Cost - ✔✔a principle that states that once all factors
of production (land, labor, capital) are at maximum output and efficiency, producing
more will cost more than average. As production increases, the opportunity cost does
as well.
✔✔Production Possibilities Frontier - ✔✔PPF
✔✔Increase in _______________ shifts budget line - ✔✔Income
, ✔✔________________ growth shifts PPC - ✔✔economic
✔✔Sources of Economic Growth - ✔✔More resources
Improved resource quality
Technological advances
✔✔Unemployment on PPC - ✔✔dot inside PPC curve
✔✔Resources - Categories, synonyms - ✔✔Land, labor
✔✔Demand - ✔✔Behavior of buyers in a market
✔✔Law of Demand - ✔✔P↑ Q↓
✔✔Substitution Effect - ✔✔the economic understanding that as prices rise — or income
decreases — consumers will replace more expensive items with less costly alternatives.
✔✔Income Effect - ✔✔as the change in consumption resulting from a change in real
income
✔✔Diminishing Marginal Utility - ✔✔aw of economics stating that as a person increases
consumption of a product while keeping consumption of other products constant, there
is a decline in the marginal utility that person derives from consuming each additional
unit of that product.
✔✔Individual Demand - ✔✔demand of one individual or firm
✔✔Market Demand - ✔✔schedule is a tabulation of the quantity of a good that all
consumers in a market will purchase at any given pric
✔✔Determinants of Demand (changes in demand)
Shifts in Demand - ✔✔-Income
-Prices of Related Goods
-Consumer Tastes
-Expectations
-Number of Buyers
✔✔Normal Good - ✔✔any goods for which demand increases when income increases,
and falls when income decreases but price remains constant, i.e. with a positive income
elasticity of demand.
✔✔Inferior Good - ✔✔is a good whose quantity demanded decreases when consumer
income rises (or quantity demanded rises when consumer income decreases), unlike
SOLUTIONS GRADED A+
✔✔Micro - ✔✔A US software firm discharged 15 workers last month and transferred the
work to India.
✔✔Micro - ✔✔An unexpected freeze in central Florida reduced the citrus crop and
caused the price of oranges to rise.
✔✔Macro - ✔✔US output, adjusted for inflation, grew by 2.4 percent 2014.
✔✔Micro - ✔✔Last week Wells Fargo Bank lowered its interest rate on business loans
by one-half of 1 percentage point.
✔✔positive - ✔✔As scientists, economists make
_____________ statements,
which attempt to describe the world as it is.
✔✔normative - ✔✔As policy advisors, economists make
_______________ statements,
which attempt to prescribe how the world should be.
✔✔Positive , normative - ✔✔____________ statements can be confirmed or refuted,
_____________ statements cannot
✔✔Positive Economics - ✔✔the branch of economics that concerns the description and
explanation of economic phenomena. It focuses on facts and cause-and-effect
behavioral relationships and includes the development and testing of economics
theories.
✔✔Budget Line - ✔✔combination of two goods one can buy with a given money income
✔✔Production Possibilities Curve (PPC) - ✔✔a graph that shows the combinations of
two goods the economy can possibly produce given the available resources and the
available technology
✔✔Law of Increasing Opportunity Cost - ✔✔a principle that states that once all factors
of production (land, labor, capital) are at maximum output and efficiency, producing
more will cost more than average. As production increases, the opportunity cost does
as well.
✔✔Production Possibilities Frontier - ✔✔PPF
✔✔Increase in _______________ shifts budget line - ✔✔Income
, ✔✔________________ growth shifts PPC - ✔✔economic
✔✔Sources of Economic Growth - ✔✔More resources
Improved resource quality
Technological advances
✔✔Unemployment on PPC - ✔✔dot inside PPC curve
✔✔Resources - Categories, synonyms - ✔✔Land, labor
✔✔Demand - ✔✔Behavior of buyers in a market
✔✔Law of Demand - ✔✔P↑ Q↓
✔✔Substitution Effect - ✔✔the economic understanding that as prices rise — or income
decreases — consumers will replace more expensive items with less costly alternatives.
✔✔Income Effect - ✔✔as the change in consumption resulting from a change in real
income
✔✔Diminishing Marginal Utility - ✔✔aw of economics stating that as a person increases
consumption of a product while keeping consumption of other products constant, there
is a decline in the marginal utility that person derives from consuming each additional
unit of that product.
✔✔Individual Demand - ✔✔demand of one individual or firm
✔✔Market Demand - ✔✔schedule is a tabulation of the quantity of a good that all
consumers in a market will purchase at any given pric
✔✔Determinants of Demand (changes in demand)
Shifts in Demand - ✔✔-Income
-Prices of Related Goods
-Consumer Tastes
-Expectations
-Number of Buyers
✔✔Normal Good - ✔✔any goods for which demand increases when income increases,
and falls when income decreases but price remains constant, i.e. with a positive income
elasticity of demand.
✔✔Inferior Good - ✔✔is a good whose quantity demanded decreases when consumer
income rises (or quantity demanded rises when consumer income decreases), unlike
