AGEC 105 Exam 1 Study Guide 2026 | Complete Review, Practice Questions &
Exam Prep
Who was the first agricultural economist? - ANS ✔✔Joseph
What percentage of the nation's output does farming and ranching account for? - ANS ✔✔2-4%
What percentage of the nation's output does the agricultural sector account for? - ANS ✔✔12-
15%
What are the categories of scarce resources? - ANS ✔✔1) Natural and Biological Resources
2) Human Resources
3) Manufactured Resources
What is the example given in the textbook of scare natural resources? - ANS ✔✔Land and
mineral deposits
What is the example given in the textbook of scare biological resources? - ANS ✔✔Wildlife,
livestock, and genetical differential crops
Human Resources are defined as: - ANS ✔✔Labor and management
Manufactured resources are also referred to as ___________. - ANS ✔✔Capital
What is an example of manufactured resources? - ANS ✔✔Machines, equipment, and
structures
, Opportunity cost refers to: - ANS ✔✔the implicit cost associated with the next best alternative
(2nd best option)
Alternative 1: manufacture cookies alone and obtain a profit of $30 million.
Alternative 2: manufacture chips alone and obtain a profit of $25 million.
Alternative 3: manufacture both cookies and chips and obtain a profit of $35 million.
What is the opportunity cost associated with this example? - ANS ✔✔The option which yield
greatest profit is Alternative 3, which means that Alternative 2 yields the second highest profit.
Therefore making the opportunity cost, or the amount you are foregoing $30 million.
What idea refers to the concept that most resources are best suited for a particular use? - ANS
✔✔Specialization
Microeconomics is described as: - ANS ✔✔a branch of economics that focuses on the actions or
behavior of individual agents or groups of agents.
Macroeconomics is described as: - ANS ✔✔another branch that centers attention on broad
aggregates of the economy.
What does the textbook say microeconomics is concerned with? - ANS ✔✔The economic
behavior of consumers who demand goods and services and producers who supply goods and
services, and the determination of the prices of those goods and services.
What does the textbook say macroeconomics is concerned with? - ANS ✔✔The growth of the
nation's gross domestic product (GDP), the gaps between the economy's potential GDP and its
current GDP, and trade-offs between unemployment and inflation.
Define the term "Fallacy of Composition." - ANS ✔✔What is true in an individual situation is not
necessarily true in the aggregate.
Exam Prep
Who was the first agricultural economist? - ANS ✔✔Joseph
What percentage of the nation's output does farming and ranching account for? - ANS ✔✔2-4%
What percentage of the nation's output does the agricultural sector account for? - ANS ✔✔12-
15%
What are the categories of scarce resources? - ANS ✔✔1) Natural and Biological Resources
2) Human Resources
3) Manufactured Resources
What is the example given in the textbook of scare natural resources? - ANS ✔✔Land and
mineral deposits
What is the example given in the textbook of scare biological resources? - ANS ✔✔Wildlife,
livestock, and genetical differential crops
Human Resources are defined as: - ANS ✔✔Labor and management
Manufactured resources are also referred to as ___________. - ANS ✔✔Capital
What is an example of manufactured resources? - ANS ✔✔Machines, equipment, and
structures
, Opportunity cost refers to: - ANS ✔✔the implicit cost associated with the next best alternative
(2nd best option)
Alternative 1: manufacture cookies alone and obtain a profit of $30 million.
Alternative 2: manufacture chips alone and obtain a profit of $25 million.
Alternative 3: manufacture both cookies and chips and obtain a profit of $35 million.
What is the opportunity cost associated with this example? - ANS ✔✔The option which yield
greatest profit is Alternative 3, which means that Alternative 2 yields the second highest profit.
Therefore making the opportunity cost, or the amount you are foregoing $30 million.
What idea refers to the concept that most resources are best suited for a particular use? - ANS
✔✔Specialization
Microeconomics is described as: - ANS ✔✔a branch of economics that focuses on the actions or
behavior of individual agents or groups of agents.
Macroeconomics is described as: - ANS ✔✔another branch that centers attention on broad
aggregates of the economy.
What does the textbook say microeconomics is concerned with? - ANS ✔✔The economic
behavior of consumers who demand goods and services and producers who supply goods and
services, and the determination of the prices of those goods and services.
What does the textbook say macroeconomics is concerned with? - ANS ✔✔The growth of the
nation's gross domestic product (GDP), the gaps between the economy's potential GDP and its
current GDP, and trade-offs between unemployment and inflation.
Define the term "Fallacy of Composition." - ANS ✔✔What is true in an individual situation is not
necessarily true in the aggregate.
