Econ 300 Final Exam Questions with
Correct Answers Graded A+ 2026
Economics -Correct Answer ✔-The study of how people allocate limited resources to
satisfy unlimited wants
Five Principles of Economic Thinking -Correct Answer ✔-Incentives matter; trade-offs
exist; opportunity cost; marginal thinking; trade creates value
Incentive -Correct Answer ✔-A factor that motivates a person to act or exert effort
Positive Incentive -Correct Answer ✔-A reward that encourages behavior
Negative Incentive -Correct Answer ✔-A penalty that discourages behavior
Direct Incentive -Correct Answer ✔-An incentive with an immediate impact
Indirect Incentive -Correct Answer ✔-An incentive with a delayed or less obvious impact
Trade-off -Correct Answer ✔-Giving up one thing to gain another because resources are
limited
Opportunity Cost -Correct Answer ✔-The value of the next best alternative given up
, Scarcity -Correct Answer ✔-Limited resources compared to unlimited wants
Marginal Thinking -Correct Answer ✔-Evaluating whether one more unit of something is
worth the added cost
Trade -Correct Answer ✔-The voluntary exchange of goods and services
Comparative Advantage -Correct Answer ✔-The ability to produce a good at a lower
opportunity cost than another
Production Possibilities Frontier (PPF) -Correct Answer ✔-A graph showing the
combinations of outputs that can be produced efficiently
Efficiency -Correct Answer ✔-Full utilization of resources to maximize output
Demand Curve -Correct Answer ✔-Graph showing the relationship between price and
quantity demanded
Quantity Demanded -Correct Answer ✔-The amount consumers are willing and able to
buy at a given price
Law of Demand -Correct Answer ✔-As price increases, quantity demanded decreases, all
else equal
Correct Answers Graded A+ 2026
Economics -Correct Answer ✔-The study of how people allocate limited resources to
satisfy unlimited wants
Five Principles of Economic Thinking -Correct Answer ✔-Incentives matter; trade-offs
exist; opportunity cost; marginal thinking; trade creates value
Incentive -Correct Answer ✔-A factor that motivates a person to act or exert effort
Positive Incentive -Correct Answer ✔-A reward that encourages behavior
Negative Incentive -Correct Answer ✔-A penalty that discourages behavior
Direct Incentive -Correct Answer ✔-An incentive with an immediate impact
Indirect Incentive -Correct Answer ✔-An incentive with a delayed or less obvious impact
Trade-off -Correct Answer ✔-Giving up one thing to gain another because resources are
limited
Opportunity Cost -Correct Answer ✔-The value of the next best alternative given up
, Scarcity -Correct Answer ✔-Limited resources compared to unlimited wants
Marginal Thinking -Correct Answer ✔-Evaluating whether one more unit of something is
worth the added cost
Trade -Correct Answer ✔-The voluntary exchange of goods and services
Comparative Advantage -Correct Answer ✔-The ability to produce a good at a lower
opportunity cost than another
Production Possibilities Frontier (PPF) -Correct Answer ✔-A graph showing the
combinations of outputs that can be produced efficiently
Efficiency -Correct Answer ✔-Full utilization of resources to maximize output
Demand Curve -Correct Answer ✔-Graph showing the relationship between price and
quantity demanded
Quantity Demanded -Correct Answer ✔-The amount consumers are willing and able to
buy at a given price
Law of Demand -Correct Answer ✔-As price increases, quantity demanded decreases, all
else equal
