Econ 201Exam questions and
answers graded 100%
What is economics? - ANS✅✅The study of the choices people will make given the presence of
scarcity.
5 Types of Resources - ANS✅✅Land, Non-human animal resources, labor, capital, technology, and
Entrepreneurial Ability
Normative Statement - ANS✅✅An opinionated statement
Positive Statement - ANS✅✅A claim that can be tested and confimed
The Economic Decision making rule - ANS✅✅If the marginal benefit of an action exceeds the
marginal cost, do it.
Nine Guide Points to Economic Thinking - ANS✅✅1) Decision-makers choose purposefully
2) Costs and benefits are subjective
3) Incentives Matter
4) Individuals make decisions at the margin
5) Scare resources are costly so trade offs must be made
6) The acquisition of information is costly
7) Anticipate Secondary Effects (unintended consequences)
8) The test of a theory is its ability to predict.
Three Economic Questions of Production - ANS✅✅1) For whom to produce
2) What to produce
3) How to produce
Law of Increasing Marginal Opportunity Cost - ANS✅✅The proposition that opportunity cost, the
value of foregone production, increases as the quantity of a good produced increases.
, Can you determining specialization when PPFS are linear? When PPFs are curved? - ANS✅✅YES
AND YES
What factors can shift the PPF? - ANS✅✅Technology, negative shocks, leisure time, work effort,
change in resource base, change in rules under which economy functions, infrastructure.
Invisible Forces - ANS✅✅Invisible Hand, Foot, and Handshake Coined by Adam Smith
Invisible Hand - ANS✅✅Economic forces i.e. supply and demand
Invisible Foot - ANS✅✅Government influence
Invisible Handshake - ANS✅✅Cultural, societal, and historical factors
Big Three Questions answered by a countries economy - ANS✅✅For whom
What
How to produce
Property rights - ANS✅✅the right to use, control and obtain the benefits from a good or service.
Private Property Rights - ANS✅✅Property rights that are exclusively held by an owner and
protected from others. Private property can be bought, sold, or transferred from one person to
another.
What is the law of demand? - ANS✅✅states that as the price increase the demand drops.
What are the two types of disequilibrium? - ANS✅✅Excess Demand: Price is below equilibrium
Excess Supply: Price is above equilibrium
What is the law of supply? - ANS✅✅Increase the price increase the supply.
Price Ceiling - ANS✅✅A price control tactic that only lets a price rise so high. Set below
equilibrium.
answers graded 100%
What is economics? - ANS✅✅The study of the choices people will make given the presence of
scarcity.
5 Types of Resources - ANS✅✅Land, Non-human animal resources, labor, capital, technology, and
Entrepreneurial Ability
Normative Statement - ANS✅✅An opinionated statement
Positive Statement - ANS✅✅A claim that can be tested and confimed
The Economic Decision making rule - ANS✅✅If the marginal benefit of an action exceeds the
marginal cost, do it.
Nine Guide Points to Economic Thinking - ANS✅✅1) Decision-makers choose purposefully
2) Costs and benefits are subjective
3) Incentives Matter
4) Individuals make decisions at the margin
5) Scare resources are costly so trade offs must be made
6) The acquisition of information is costly
7) Anticipate Secondary Effects (unintended consequences)
8) The test of a theory is its ability to predict.
Three Economic Questions of Production - ANS✅✅1) For whom to produce
2) What to produce
3) How to produce
Law of Increasing Marginal Opportunity Cost - ANS✅✅The proposition that opportunity cost, the
value of foregone production, increases as the quantity of a good produced increases.
, Can you determining specialization when PPFS are linear? When PPFs are curved? - ANS✅✅YES
AND YES
What factors can shift the PPF? - ANS✅✅Technology, negative shocks, leisure time, work effort,
change in resource base, change in rules under which economy functions, infrastructure.
Invisible Forces - ANS✅✅Invisible Hand, Foot, and Handshake Coined by Adam Smith
Invisible Hand - ANS✅✅Economic forces i.e. supply and demand
Invisible Foot - ANS✅✅Government influence
Invisible Handshake - ANS✅✅Cultural, societal, and historical factors
Big Three Questions answered by a countries economy - ANS✅✅For whom
What
How to produce
Property rights - ANS✅✅the right to use, control and obtain the benefits from a good or service.
Private Property Rights - ANS✅✅Property rights that are exclusively held by an owner and
protected from others. Private property can be bought, sold, or transferred from one person to
another.
What is the law of demand? - ANS✅✅states that as the price increase the demand drops.
What are the two types of disequilibrium? - ANS✅✅Excess Demand: Price is below equilibrium
Excess Supply: Price is above equilibrium
What is the law of supply? - ANS✅✅Increase the price increase the supply.
Price Ceiling - ANS✅✅A price control tactic that only lets a price rise so high. Set below
equilibrium.
