ECON 110 ACTUAL EXAM 1 QUESTIONS
WITH CORRECT ANSWERS 2026/2027
Economics - CORRECT ANSWER -The study of how individuals, firms, and society make decisions
to allocate limited resources among many competing wants.
Rational - CORRECT ANSWER -Choosing to skip a party to ace an exam.
Self-interested - CORRECT ANSWER -Looking for the best meal deal on campus.
Incentives - CORRECT ANSWER -Signing up for a club to earn extra credit.
Choices - CORRECT ANSWER -We face trade-offs every day—from choosing classes to spending
time with friends.
Costs - CORRECT ANSWER -Every 'yes' means a 'no' to something else—that's opportunity cost.
Human Behavior - CORRECT ANSWER -We make decisions based on incentives, emotions, and
goals—not always perfectly, but predictably.
Microeconomics - CORRECT ANSWER -The study of decision-making by individuals, businesses,
and industries.
Macroeconomics - CORRECT ANSWER -The study of broader issues in the economy, such as
inflation, unemployment, and national output.
Economic Model - CORRECT ANSWER -It simplifies the real world so we can understand it better.
, Positive analysis - CORRECT ANSWER -The use of statements or questions that are based on the
understanding of information or facts.
Normative analysis - CORRECT ANSWER -The use of statements or questions that are based in
opinions or societal beliefs on what should or should not take place.
Ceteris Paribus - CORRECT ANSWER -An assumption used in economics that all other relevant
factors or variables are held constant.
Efficiency - CORRECT ANSWER -How well resources are used and allocated. Getting the most out
of resources.
Equity - CORRECT ANSWER -The fairness of various issues and policies.
Scarcity - CORRECT ANSWER -Scarcity means we have unlimited wants but limited resources.
Opportunity Cost - CORRECT ANSWER -The value of the next best thing you give up when you
make a choice.
Trade-off - CORRECT ANSWER -Choosing one option, hence giving up something else.
Specialization - CORRECT ANSWER -Focusing on what you do best.
Market Efficiency - CORRECT ANSWER -The condition of getting the most value from resources,
though it can lead to undesirable outcomes like pollution.
WITH CORRECT ANSWERS 2026/2027
Economics - CORRECT ANSWER -The study of how individuals, firms, and society make decisions
to allocate limited resources among many competing wants.
Rational - CORRECT ANSWER -Choosing to skip a party to ace an exam.
Self-interested - CORRECT ANSWER -Looking for the best meal deal on campus.
Incentives - CORRECT ANSWER -Signing up for a club to earn extra credit.
Choices - CORRECT ANSWER -We face trade-offs every day—from choosing classes to spending
time with friends.
Costs - CORRECT ANSWER -Every 'yes' means a 'no' to something else—that's opportunity cost.
Human Behavior - CORRECT ANSWER -We make decisions based on incentives, emotions, and
goals—not always perfectly, but predictably.
Microeconomics - CORRECT ANSWER -The study of decision-making by individuals, businesses,
and industries.
Macroeconomics - CORRECT ANSWER -The study of broader issues in the economy, such as
inflation, unemployment, and national output.
Economic Model - CORRECT ANSWER -It simplifies the real world so we can understand it better.
, Positive analysis - CORRECT ANSWER -The use of statements or questions that are based on the
understanding of information or facts.
Normative analysis - CORRECT ANSWER -The use of statements or questions that are based in
opinions or societal beliefs on what should or should not take place.
Ceteris Paribus - CORRECT ANSWER -An assumption used in economics that all other relevant
factors or variables are held constant.
Efficiency - CORRECT ANSWER -How well resources are used and allocated. Getting the most out
of resources.
Equity - CORRECT ANSWER -The fairness of various issues and policies.
Scarcity - CORRECT ANSWER -Scarcity means we have unlimited wants but limited resources.
Opportunity Cost - CORRECT ANSWER -The value of the next best thing you give up when you
make a choice.
Trade-off - CORRECT ANSWER -Choosing one option, hence giving up something else.
Specialization - CORRECT ANSWER -Focusing on what you do best.
Market Efficiency - CORRECT ANSWER -The condition of getting the most value from resources,
though it can lead to undesirable outcomes like pollution.
