ECON 110 FINAL QUESTIONS WITH CORRECT
ANSWERS 2026/2027
Opportunity Cost - CORRECT ANSWER -What you give up to get something
Economics - CORRECT ANSWER -How society manages its scarce resources
Efficiency - CORRECT ANSWER -Society gets the most from its scarce resources
Equality - CORRECT ANSWER -Equal distribution of economic pie
Rational people... - CORRECT ANSWER -Think on the margin (cost-benefit analysis of going to
college vs. going straight to work)
Trade - CORRECT ANSWER -Makes everyone better off
Standard of Living - CORRECT ANSWER -Determined by a country's ability to produce goods and
services
High Inflation - CORRECT ANSWER -Low unemployment
Low Inflation - CORRECT ANSWER -High unemployment
Households - CORRECT ANSWER -(us) own factors of production, sell for income, consume
goods and services
, Firms - CORRECT ANSWER -(target, Walmart, etc.) buy factors of production, sell goods and
services
Circular Flow Diagram - CORRECT ANSWER -Shows flow between firms and households
Production Possibilities Frontier - CORRECT ANSWER -shows two goods economy could produce
involves shifting resources
involves sacrifices
slope of ppf is the oc of one good in terms of the other
OC constant on ppf - CORRECT ANSWER -straight ppf, uses same resources equally
OC rises on ppf - CORRECT ANSWER -bow-shaped ppf, resources not easily adaptable
Positive Statement - CORRECT ANSWER -describes world as it is
Normative Statement - CORRECT ANSWER -prescribes how the world should be
Absolute Advantage - CORRECT ANSWER -produce more goods using fewest goods
w/ a set amount of inputs, producing more than anyone else
Comparative Advantage - CORRECT ANSWER -produce a good at lower OC than others
One Person - CORRECT ANSWER -Can have AA in both goods
Cannot have CA in both goods (no reason to trade)
ANSWERS 2026/2027
Opportunity Cost - CORRECT ANSWER -What you give up to get something
Economics - CORRECT ANSWER -How society manages its scarce resources
Efficiency - CORRECT ANSWER -Society gets the most from its scarce resources
Equality - CORRECT ANSWER -Equal distribution of economic pie
Rational people... - CORRECT ANSWER -Think on the margin (cost-benefit analysis of going to
college vs. going straight to work)
Trade - CORRECT ANSWER -Makes everyone better off
Standard of Living - CORRECT ANSWER -Determined by a country's ability to produce goods and
services
High Inflation - CORRECT ANSWER -Low unemployment
Low Inflation - CORRECT ANSWER -High unemployment
Households - CORRECT ANSWER -(us) own factors of production, sell for income, consume
goods and services
, Firms - CORRECT ANSWER -(target, Walmart, etc.) buy factors of production, sell goods and
services
Circular Flow Diagram - CORRECT ANSWER -Shows flow between firms and households
Production Possibilities Frontier - CORRECT ANSWER -shows two goods economy could produce
involves shifting resources
involves sacrifices
slope of ppf is the oc of one good in terms of the other
OC constant on ppf - CORRECT ANSWER -straight ppf, uses same resources equally
OC rises on ppf - CORRECT ANSWER -bow-shaped ppf, resources not easily adaptable
Positive Statement - CORRECT ANSWER -describes world as it is
Normative Statement - CORRECT ANSWER -prescribes how the world should be
Absolute Advantage - CORRECT ANSWER -produce more goods using fewest goods
w/ a set amount of inputs, producing more than anyone else
Comparative Advantage - CORRECT ANSWER -produce a good at lower OC than others
One Person - CORRECT ANSWER -Can have AA in both goods
Cannot have CA in both goods (no reason to trade)
