ECON 110 ZIRLOTT TEST 1 STUDY GUIDE EXAM
QUESTIONS WITH CORRECT ANSWERS 2026/2027
Economics - CORRECT ANSWER -the study of how society manages its scarce resources
Microeconomics - CORRECT ANSWER -study of how households and firms make decisions and
how they interact in markets; ti examine behavior and operation of the individual consumers
and firms that make up economy.
Macroeconomics - CORRECT ANSWER -study of economy wide phenomena, including inflation,
unemployment, and economic growth
Equality / equity - CORRECT ANSWER -the property of distributing economic prosperity
uniformly among the members of society
Scarcity - CORRECT ANSWER -the limited nature of society's resources
Efficiency - CORRECT ANSWER -the property of society getting the most it can from its scarce
resources
Tradeoff - CORRECT ANSWER -to achieve greater equality. Getting more of one good requires
sacrificing some of the other
Going to a party the night before your midterm leaves less time for studying -> what is this an
example of - CORRECT ANSWER -tradeoff
Having more money to buy stuff requires working longer hours, which leaves less time for
leisure -> what is this an example of - CORRECT ANSWER -tradeoff
, Protecting the environment requires resources that could otherwise be used to produce
consumer goods -> what is this an example of - CORRECT ANSWER -tradeoff
Opportunity cost - CORRECT ANSWER -whatever must be given up to obtain some item
Give an example of opportunity cost - CORRECT ANSWER -college athletes who can earn
millions if they drop out of school and play professional sports are aware that the opportunity
cost of their attending college is very high. Not surprising they often decide that the benefit of a
college education is not worth the cost.
Rational people - CORRECT ANSWER -people who systematically and purposefully do the best
they can to achieve their objectives
Thinking at the margin - CORRECT ANSWER -make decisions by evaluating costs and benefits of
marginal changes (incremental adjustments to an existing plan)
When a student considers whether to go to college for an additional year, he compares the fees
and foregone wages to the extra income he could earn with the extra year of edu. -> what is this
an example of - CORRECT ANSWER -thinking at the margin
When a manager considers whether to increase output, she compares the cost of the needed
labor and materials to the extra revenue-> what is this an example of - CORRECT ANSWER -
thinking at the margin
Market - CORRECT ANSWER -a group of buyers and sellers (need not be a single location)
Market economy - CORRECT ANSWER -an economy that allocates resources through the
decentralized decisions of many firms and households as they interact in markets for goods and
services
QUESTIONS WITH CORRECT ANSWERS 2026/2027
Economics - CORRECT ANSWER -the study of how society manages its scarce resources
Microeconomics - CORRECT ANSWER -study of how households and firms make decisions and
how they interact in markets; ti examine behavior and operation of the individual consumers
and firms that make up economy.
Macroeconomics - CORRECT ANSWER -study of economy wide phenomena, including inflation,
unemployment, and economic growth
Equality / equity - CORRECT ANSWER -the property of distributing economic prosperity
uniformly among the members of society
Scarcity - CORRECT ANSWER -the limited nature of society's resources
Efficiency - CORRECT ANSWER -the property of society getting the most it can from its scarce
resources
Tradeoff - CORRECT ANSWER -to achieve greater equality. Getting more of one good requires
sacrificing some of the other
Going to a party the night before your midterm leaves less time for studying -> what is this an
example of - CORRECT ANSWER -tradeoff
Having more money to buy stuff requires working longer hours, which leaves less time for
leisure -> what is this an example of - CORRECT ANSWER -tradeoff
, Protecting the environment requires resources that could otherwise be used to produce
consumer goods -> what is this an example of - CORRECT ANSWER -tradeoff
Opportunity cost - CORRECT ANSWER -whatever must be given up to obtain some item
Give an example of opportunity cost - CORRECT ANSWER -college athletes who can earn
millions if they drop out of school and play professional sports are aware that the opportunity
cost of their attending college is very high. Not surprising they often decide that the benefit of a
college education is not worth the cost.
Rational people - CORRECT ANSWER -people who systematically and purposefully do the best
they can to achieve their objectives
Thinking at the margin - CORRECT ANSWER -make decisions by evaluating costs and benefits of
marginal changes (incremental adjustments to an existing plan)
When a student considers whether to go to college for an additional year, he compares the fees
and foregone wages to the extra income he could earn with the extra year of edu. -> what is this
an example of - CORRECT ANSWER -thinking at the margin
When a manager considers whether to increase output, she compares the cost of the needed
labor and materials to the extra revenue-> what is this an example of - CORRECT ANSWER -
thinking at the margin
Market - CORRECT ANSWER -a group of buyers and sellers (need not be a single location)
Market economy - CORRECT ANSWER -an economy that allocates resources through the
decentralized decisions of many firms and households as they interact in markets for goods and
services
