ECON 200 COMPREHENSIVE EXAM
QUESTIONS AND ANSWERS PACK
2026
▶ creative destruction. Answer: out with the old and in with the new
▶ How are the economic questions answered in traditional economies?.
Answer: The way its always been done
The same things are being produced the same way for the same people.
▶ Supply/Demand. Answer: Supply- What is available.
Demand- What people want.
▶ What drives the economy?. Answer: Individuals, competition, and self
interest
▶ Voluntary exchange. Answer: No control. People should have a choice
in which they determine.
▶ Choice. Answer: A good thing to have. Why? Increased utility.
▶ Free trade. Answer: Open to buy and sell. Trade=Wealth.
▶ Risk and entrepreneurship. Answer: There is risk. It is good because of
innovation but bad because of high stakes.
▶ Capitalism. Answer: An economic system in which the means of
production and distribution are privately or corporately owned and
development is proportionate to the accumulation and reinvestment of
profits gained in a free market.
▶ Free market. Answer: People are free and have economic freedom.
They can buy, sell, and trade openly with minimal governmental restriction.
▶ Who is Adam Smith?. Answer: market economy
,Main prophet of Laissez-Faire Economics.
Free Market would help everyone.
Self interest would serve society.
Supported by the rise of the industrial age.
The "Invisible Hand" will guide the economy.
-Socialist
▶ Market economies. Answer: Individuals and companies have private
property rights.
Individuals and companies have the right to freely trade or sell property to
others.
The Lorax- the oncler
▶ What goals are achieved with command or centrally directed
economies?. Answer: Full Employment, Price Stability, Financial Security,
Economic Equity
▶ Who is Karl Marx?. Answer: command economy
Father of Communism
Wrote Communist Manifesto
Believed history was about class struggle between the haves (bourgeois)
and have-nots (proletariat).
Urged workers of the world to unite to overthrow oppression by the
bourgeois and then set up a classless society.
Basis for various revolutions (Russia, Asia, Africa, and Latin America).
-Socialist
▶ Who is Robert Owen?. Answer: command
Utopian, from Thomas More's ideal society, Owen set up a model
community to put his theory into place.
Limited child labor and promoted worker's unions.
Believed that employers could set up decent living and working conditions
and still be profitable.
-Socialist
▶ Centrally Directed or Command Economies. Answer: -Utopian socialist
emerged and wanted communities where work and resources as well as
profits were shared within and evenly distributed amongst the
community...these failed but the ideas concerning child labor laws and
safety and health regulations remained.
, -Principal means of production (land and capital) are owned by the state.
-All or most of the economic decisions are made by an individual, small
group, or governing body.
-Resources are allocated to a plan intended, in theory, to meet the
economic needs of most people.
-How much the state owns or allocates varies.
Many times this type of economic system is meant to build surpluses but
this often leads to forced labor and quotas.
-Centrally Directed economies often focus on heavy industry such as steel,
oil, and machinery rather than consumer goods.
▶ "Care taker" Economics. Answer: People will take better care of
something if they "own" it.
▶ Private Property. Answer: Owned by individuals/groups (not public).
▶ Eminent Domain. Answer: Govt. will seize property if they believe it to
be in the best interest of society.
▶ Division of Labor/Specialization. Answer: People do what they do best.
Efficiency=Growth=Full employment.
▶ Tragedy of the Commons. Answer: When things are commonly owned
they are not well taken care of.
Examples: the commons, air, the ocean, black rhinos.
▶ Comparative advantage. Answer: When producers produce or choose
not to produce something because they have an abundance or lack of
economic resources due to geography, politics, technology, etc.
comparatively to others who are producing or not producing a product due
to relative opportunity cost.
▶ Absolute advantage. Answer: When a particular individual or country
can produce more of a specific commodity than another individual or
country using the same amount of resources.
▶ (Market structures) Competition leads to:. Answer: Competition leads to:
Lower prices
Better quality
Efficiency
QUESTIONS AND ANSWERS PACK
2026
▶ creative destruction. Answer: out with the old and in with the new
▶ How are the economic questions answered in traditional economies?.
Answer: The way its always been done
The same things are being produced the same way for the same people.
▶ Supply/Demand. Answer: Supply- What is available.
Demand- What people want.
▶ What drives the economy?. Answer: Individuals, competition, and self
interest
▶ Voluntary exchange. Answer: No control. People should have a choice
in which they determine.
▶ Choice. Answer: A good thing to have. Why? Increased utility.
▶ Free trade. Answer: Open to buy and sell. Trade=Wealth.
▶ Risk and entrepreneurship. Answer: There is risk. It is good because of
innovation but bad because of high stakes.
▶ Capitalism. Answer: An economic system in which the means of
production and distribution are privately or corporately owned and
development is proportionate to the accumulation and reinvestment of
profits gained in a free market.
▶ Free market. Answer: People are free and have economic freedom.
They can buy, sell, and trade openly with minimal governmental restriction.
▶ Who is Adam Smith?. Answer: market economy
,Main prophet of Laissez-Faire Economics.
Free Market would help everyone.
Self interest would serve society.
Supported by the rise of the industrial age.
The "Invisible Hand" will guide the economy.
-Socialist
▶ Market economies. Answer: Individuals and companies have private
property rights.
Individuals and companies have the right to freely trade or sell property to
others.
The Lorax- the oncler
▶ What goals are achieved with command or centrally directed
economies?. Answer: Full Employment, Price Stability, Financial Security,
Economic Equity
▶ Who is Karl Marx?. Answer: command economy
Father of Communism
Wrote Communist Manifesto
Believed history was about class struggle between the haves (bourgeois)
and have-nots (proletariat).
Urged workers of the world to unite to overthrow oppression by the
bourgeois and then set up a classless society.
Basis for various revolutions (Russia, Asia, Africa, and Latin America).
-Socialist
▶ Who is Robert Owen?. Answer: command
Utopian, from Thomas More's ideal society, Owen set up a model
community to put his theory into place.
Limited child labor and promoted worker's unions.
Believed that employers could set up decent living and working conditions
and still be profitable.
-Socialist
▶ Centrally Directed or Command Economies. Answer: -Utopian socialist
emerged and wanted communities where work and resources as well as
profits were shared within and evenly distributed amongst the
community...these failed but the ideas concerning child labor laws and
safety and health regulations remained.
, -Principal means of production (land and capital) are owned by the state.
-All or most of the economic decisions are made by an individual, small
group, or governing body.
-Resources are allocated to a plan intended, in theory, to meet the
economic needs of most people.
-How much the state owns or allocates varies.
Many times this type of economic system is meant to build surpluses but
this often leads to forced labor and quotas.
-Centrally Directed economies often focus on heavy industry such as steel,
oil, and machinery rather than consumer goods.
▶ "Care taker" Economics. Answer: People will take better care of
something if they "own" it.
▶ Private Property. Answer: Owned by individuals/groups (not public).
▶ Eminent Domain. Answer: Govt. will seize property if they believe it to
be in the best interest of society.
▶ Division of Labor/Specialization. Answer: People do what they do best.
Efficiency=Growth=Full employment.
▶ Tragedy of the Commons. Answer: When things are commonly owned
they are not well taken care of.
Examples: the commons, air, the ocean, black rhinos.
▶ Comparative advantage. Answer: When producers produce or choose
not to produce something because they have an abundance or lack of
economic resources due to geography, politics, technology, etc.
comparatively to others who are producing or not producing a product due
to relative opportunity cost.
▶ Absolute advantage. Answer: When a particular individual or country
can produce more of a specific commodity than another individual or
country using the same amount of resources.
▶ (Market structures) Competition leads to:. Answer: Competition leads to:
Lower prices
Better quality
Efficiency
