ECON 1113 Final Exam Questions With Correct Answers.

ECON 1113 Final Exam Questions With
Correct Answers

What is Economics? - CORRECT ANSWER✔✔-The study of how people
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manage their resources
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Microeconomics - CORRECT ANSWER✔✔-Study of individuals and firms
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(small scale)|




Macroeconomics - CORRECT ANSWER✔✔-Regional or national, state,
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international (large scale) | |




Scarcity - CORRECT ANSWER✔✔-Peoples wants are always greater than
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their resources
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Opportunity Cost - CORRECT ANSWER✔✔-Every decision weighs the
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costs and benefits trade off. Benefits are easily calculated
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Incentives - CORRECT ANSWER✔✔-Something that causes change in the
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|trade-offs faced. |




Positive Incentive: Lower opportunity cost, make action more preferable
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Negative Incentive: The opposite
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, Efficiency - CORRECT ANSWER✔✔-Resources are used to produce
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goods/services with the greatest economic value | | | | |




Market Failure - CORRECT ANSWER✔✔-People/Firms prevented from
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capturing benefits or costs imposed on them
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Correlation - CORRECT ANSWER✔✔-Consistently observed relationship
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between two events | | |




Positive Correlation: If A increases B increases
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Negative Correlation: If A increases B decreases
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Causation - CORRECT ANSWER✔✔-A causes B
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A relationship where one event causes the other
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Models - CORRECT ANSWER✔✔-Show how people/firms/governments
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make decisions about managing resources and the interactions of their
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decisions. Simplifying complex problems
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Production Possibilities Frontier - CORRECT ANSWER✔✔-Line(or curve)
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that shows all possible combinations of two outputs that can be
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produced while using all available resources
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