Econ-102-PSU-Exam-1 UPDATED ACTUAL Questions And Correct Answers
Terms in this set (51)
Incentives rewards or penalties for engaging in a particular activity
Economics The study of how people allocate their limited resources to satisfy their unlimited
wants
Resources things used to produce goods and services to satisfy people's wants
Wants what people would buy if their incomes were unlimited
Microeconomics the study of decision making undertaken by individuals and by firms
Macroeconomics the study of the behavior of the economy as a whole, including such economy
wide phenomena as changes in unemployment the general price level, and
national income.
Aggregates total amounts or quantities.
Rationality Assumption The assumption that people do not intentionally make decisions that would leave
them worse off
Models or theories Simplified representatives of the real world used as the basis for predictions or
explanations
Ceteris paribus assumption The assumption that nothing changes except the factor factors being studied
Empirical Relying on real-world data in evaluation the usefulness of a model
Behavioral Economics An approach to the study of consumer behavior that emphasizes psychological
limitations interfere with rational decision making
Bounded Rationality The hypothesis that people are nearly, but not fully, rational, sot hat they can't
examine every possible choice available to them but instead use simple rules of
thumb to sort among the alternatives that happen to occur to them
Positive Economics Analysis that is strictly limited to making either purely descriptive statements or
scientific predictions; for example, "If A, then B." A statement of WHAT IS.
Normative Economics Analysis involving value judgements about economic policies; relates to whether
outcomes are good or bad. A statement of WHAT OUGHT TO BE.
Scarcity A situation in which the ingredients for producing the things that people desire are
insufficient to satisfy all wants at a zero price
Terms in this set (51)
Incentives rewards or penalties for engaging in a particular activity
Economics The study of how people allocate their limited resources to satisfy their unlimited
wants
Resources things used to produce goods and services to satisfy people's wants
Wants what people would buy if their incomes were unlimited
Microeconomics the study of decision making undertaken by individuals and by firms
Macroeconomics the study of the behavior of the economy as a whole, including such economy
wide phenomena as changes in unemployment the general price level, and
national income.
Aggregates total amounts or quantities.
Rationality Assumption The assumption that people do not intentionally make decisions that would leave
them worse off
Models or theories Simplified representatives of the real world used as the basis for predictions or
explanations
Ceteris paribus assumption The assumption that nothing changes except the factor factors being studied
Empirical Relying on real-world data in evaluation the usefulness of a model
Behavioral Economics An approach to the study of consumer behavior that emphasizes psychological
limitations interfere with rational decision making
Bounded Rationality The hypothesis that people are nearly, but not fully, rational, sot hat they can't
examine every possible choice available to them but instead use simple rules of
thumb to sort among the alternatives that happen to occur to them
Positive Economics Analysis that is strictly limited to making either purely descriptive statements or
scientific predictions; for example, "If A, then B." A statement of WHAT IS.
Normative Economics Analysis involving value judgements about economic policies; relates to whether
outcomes are good or bad. A statement of WHAT OUGHT TO BE.
Scarcity A situation in which the ingredients for producing the things that people desire are
insufficient to satisfy all wants at a zero price
