ECON 200 Exam 1 Study Guide With
100% Correct Solutions | Verified
What is economics? CORRECT ANSWERS A study of how individuals and societies
experiencing unlimited wants, chose to satisfy those wants
Post Hoc Fallacy CORRECT ANSWERS An invalid conclusion from observations or
facts
Fallacy of Composition CORRECT ANSWERS An invalid conclusion from the
assumption that what is true of a part is true of the whole
A positive statement is... CORRECT ANSWERS What is
A normal statement is... CORRECT ANSWERS What should be
5 Powers of Economic Thinking CORRECT ANSWERS 1. Resources cost more than
you think
2. All decisions are rational
3. All decisions are made at the margin
4. The answer to most economic problems is? (IT DEPENDS)
5. People are maximizers
4 Types of Economic Systems CORRECT ANSWERS 1. Market
2. Demand
3. Traditional
4. Mixed
What questions do the 4 types of economic systems answer? CORRECT ANSWERS 1.
What goods/services should be produced?
2. How they should be produced
3. From whom they should be produced
Marginal benefit CORRECT ANSWERS The benefit of producing another unit;
maximum amount one is willing to pay
Marginal Cost CORRECT ANSWERS The opportunity cost of producing one more unit
of a good
Where do we maximize? CORRECT ANSWERS Where marginal benefit=marginal cost
What is a Production Possibilities Curve? CORRECT ANSWERS A curve that illustrates
the production possibilities of an economy
, A production possibilities frontier illustrates the maximum amount of two different goods
that can be produced if:
A. Society is using all of its resources in the most efficient manner possible
B. The price of both goods is identical
C. The price of both goods is held constant
D. Low-skilled workers can be prevented from getting job CORRECT ANSWERS A.
Society is using all of its resources in the most efficient manner possible
Gains from specialization and trade result in a country consuming:
A. Inside its production possibilities frontier
B. On its production possibilities frontier
C. Outside is production possibilities frontier
D. None of the above CORRECT ANSWERS C. Outside is production possibilities
frontier
When a production possibilities frontier is a straight line, production occurs under
conditions of:
A. Constant costs
B. Increasing costs
C. Decreasing costs
D. None of the above CORRECT ANSWERS A. Constant costs
A point on a country's production possibilities frontier indicates:
A. A level of production that would cause unemployment
B. A level of production that is unattainable
C. An undesirable level of production
D. A level of production where resources are fully employed CORRECT ANSWERS D.
A level of production where resources are fully employed
When a production possibilities frontier is bowed out from the origin, production occurs
under conditions of:
A. Constant costs
B. Increasing costs
C. Decreasing costs
D. None of the above CORRECT ANSWERS B. Increasing costs
True or False: A production possibilities frontier graphically represents the maximum
output of a country when the supply of resources and technology are constant.
CORRECT ANSWERS True
Opportunity Cost CORRECT ANSWERS The value of the next highest valued
alternative forgone
Opportunity cost is:
A. The dollar cost of producing the goods
B. The dollar price paid for final goods and services
100% Correct Solutions | Verified
What is economics? CORRECT ANSWERS A study of how individuals and societies
experiencing unlimited wants, chose to satisfy those wants
Post Hoc Fallacy CORRECT ANSWERS An invalid conclusion from observations or
facts
Fallacy of Composition CORRECT ANSWERS An invalid conclusion from the
assumption that what is true of a part is true of the whole
A positive statement is... CORRECT ANSWERS What is
A normal statement is... CORRECT ANSWERS What should be
5 Powers of Economic Thinking CORRECT ANSWERS 1. Resources cost more than
you think
2. All decisions are rational
3. All decisions are made at the margin
4. The answer to most economic problems is? (IT DEPENDS)
5. People are maximizers
4 Types of Economic Systems CORRECT ANSWERS 1. Market
2. Demand
3. Traditional
4. Mixed
What questions do the 4 types of economic systems answer? CORRECT ANSWERS 1.
What goods/services should be produced?
2. How they should be produced
3. From whom they should be produced
Marginal benefit CORRECT ANSWERS The benefit of producing another unit;
maximum amount one is willing to pay
Marginal Cost CORRECT ANSWERS The opportunity cost of producing one more unit
of a good
Where do we maximize? CORRECT ANSWERS Where marginal benefit=marginal cost
What is a Production Possibilities Curve? CORRECT ANSWERS A curve that illustrates
the production possibilities of an economy
, A production possibilities frontier illustrates the maximum amount of two different goods
that can be produced if:
A. Society is using all of its resources in the most efficient manner possible
B. The price of both goods is identical
C. The price of both goods is held constant
D. Low-skilled workers can be prevented from getting job CORRECT ANSWERS A.
Society is using all of its resources in the most efficient manner possible
Gains from specialization and trade result in a country consuming:
A. Inside its production possibilities frontier
B. On its production possibilities frontier
C. Outside is production possibilities frontier
D. None of the above CORRECT ANSWERS C. Outside is production possibilities
frontier
When a production possibilities frontier is a straight line, production occurs under
conditions of:
A. Constant costs
B. Increasing costs
C. Decreasing costs
D. None of the above CORRECT ANSWERS A. Constant costs
A point on a country's production possibilities frontier indicates:
A. A level of production that would cause unemployment
B. A level of production that is unattainable
C. An undesirable level of production
D. A level of production where resources are fully employed CORRECT ANSWERS D.
A level of production where resources are fully employed
When a production possibilities frontier is bowed out from the origin, production occurs
under conditions of:
A. Constant costs
B. Increasing costs
C. Decreasing costs
D. None of the above CORRECT ANSWERS B. Increasing costs
True or False: A production possibilities frontier graphically represents the maximum
output of a country when the supply of resources and technology are constant.
CORRECT ANSWERS True
Opportunity Cost CORRECT ANSWERS The value of the next highest valued
alternative forgone
Opportunity cost is:
A. The dollar cost of producing the goods
B. The dollar price paid for final goods and services
