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ECN 211 Exam 1 Review Questions and Answers 100% Correct |
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ECN 211 Exam 1 Review Questions andAnswers 100% Correct | 2024-2025
Ten Principes - ANSWER Principle 1: People face tradeoffs
Principle 2: The cost of something what you give up getting it
Principle 3: Rational people think at the margin
Principle 4: People respond to incentives
Principle 5: Trade can make everyone better off
Principle 6: Markets are usually a good way to organize economic
Principle 7: Government can sometimes improve market outcomes
Principle 8: A country's standard of living depends on its ability to produce goods
and services
Principle 9: Prices rise when government prints too much money
Principle 10: Society faces a short-run trade off between inflation and
unemployment
First 4 principles have to do with what? - ANSWER How people make
descisions
What do the last 4 principles have to do with? - ANSWER Productivity are the
ultimate source of living
Scarcity - ANSWER The limited nature of society's resources
Economics - ANSWER The study of how society manages its scarce resources
, The economist plays 2 roles - ANSWER Scientist: Trying to explain the world
Policy Advisers: Trying to improve the world
Circular-flow diagram is what? - ANSWER A visual model of the economy, slows
how dollars and goods and services flow through markets among households and
firms
Factors of production are defined as? and what are some examples? - ANSWER
the resources the economy uses to produce goods and services including
1. Labor
2. Land
3. Capital (buildings and machines used in production)
Households in the circular-flow diagram do what? - ANSWER 1. Own the
factors of production, sell/rent them to firms for income
2. Buy and consume goods and services
Firms in the circular-flow diagram do what? - ANSWER 1. Buy/hire factors of
production, use them to produce goods and services
2. Sell goods and services for wages, rent, and profit
PPF is a graph that... - ANSWER shows the combinations of two goods the
economy can possibly produce given the available resources and the available
technology
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