ECON B251 Final Exam ACTUAL
QUESTIONS AND CORRECT ANSWERS
Scarcity Principle - CORRECT ANSWERS all actions have tradeoffs
Opportunity Cost - CORRECT ANSWERS call of the best foregone
alternative action
Marginal cost-benefit principle - CORRECT ANSWERS take an action if
and only if the extra benefits are at least as great as the extra costs
Absolute advantage - CORRECT ANSWERS the ability to complete a
task using less resources (time, money, etc.)
Comparative advantage - CORRECT ANSWERS lower opportunity cost
Efficient - CORRECT ANSWERS if there is no alternative that improves
outcomes for someone without harming at least one other person
Inefficiency - CORRECT ANSWERS it is possible to make someone
better off without hurting anyone else
Equity - CORRECT ANSWERS How fair an allocation rule is
Result's based equity - CORRECT ANSWERS after the allocation
happens, how widely dispersed are the resulting values?
Rule-based equity - CORRECT ANSWERS if you knew the rule, would
you prefer to be any particular participant?
, Producer surplus - CORRECT ANSWERS the extra benefit producers
receive from selling a good or service, measured by the price the producer
actually received minus the price the producer would have been willing to
accept
Consumer surplus - CORRECT ANSWERS the amount a buyer is
willing to pay for a good minus the amount the buyer actually pays for it
Who does the tax burden fall on? - CORRECT ANSWERS the less
elastic side of the market
Utility - CORRECT ANSWERS the satisfaction people derive from
consumption
Maximized utility - CORRECT ANSWERS when marginal utility is 0 or
the last time marginal utility was positive
Rational Spending Rule - CORRECT ANSWERS spending should be
allocated across goods so that the marginal utility per dollar is the same for each
good
(must be spending the entire budget)
Perfect competition - CORRECT ANSWERS market price won't change
Monopoly - CORRECT ANSWERS firm can "choose" market price
(consistent with market demand)
QUESTIONS AND CORRECT ANSWERS
Scarcity Principle - CORRECT ANSWERS all actions have tradeoffs
Opportunity Cost - CORRECT ANSWERS call of the best foregone
alternative action
Marginal cost-benefit principle - CORRECT ANSWERS take an action if
and only if the extra benefits are at least as great as the extra costs
Absolute advantage - CORRECT ANSWERS the ability to complete a
task using less resources (time, money, etc.)
Comparative advantage - CORRECT ANSWERS lower opportunity cost
Efficient - CORRECT ANSWERS if there is no alternative that improves
outcomes for someone without harming at least one other person
Inefficiency - CORRECT ANSWERS it is possible to make someone
better off without hurting anyone else
Equity - CORRECT ANSWERS How fair an allocation rule is
Result's based equity - CORRECT ANSWERS after the allocation
happens, how widely dispersed are the resulting values?
Rule-based equity - CORRECT ANSWERS if you knew the rule, would
you prefer to be any particular participant?
, Producer surplus - CORRECT ANSWERS the extra benefit producers
receive from selling a good or service, measured by the price the producer
actually received minus the price the producer would have been willing to
accept
Consumer surplus - CORRECT ANSWERS the amount a buyer is
willing to pay for a good minus the amount the buyer actually pays for it
Who does the tax burden fall on? - CORRECT ANSWERS the less
elastic side of the market
Utility - CORRECT ANSWERS the satisfaction people derive from
consumption
Maximized utility - CORRECT ANSWERS when marginal utility is 0 or
the last time marginal utility was positive
Rational Spending Rule - CORRECT ANSWERS spending should be
allocated across goods so that the marginal utility per dollar is the same for each
good
(must be spending the entire budget)
Perfect competition - CORRECT ANSWERS market price won't change
Monopoly - CORRECT ANSWERS firm can "choose" market price
(consistent with market demand)
