EC 211 - Macroeconomics Questions and Answers (100% Pass)

Good Something we want more of Rare Relatively few Scarce Have to give up something to get it Opportunity Cost Your next best alternative after whatever you give up Marginal extra, additional or incremental Ceteris Paribus Master01 | October, 2024/2025 | Latest update 1 | P a g e | © copyright 2024/2025 | Grade A+ "other things constant" - assuming there isn't a pandemic, hurricane, change in population, etc. Post Hoc Ergo Propter Hoc "Follows, therefore, because of" - correlation does not equal causation Markets the means by which buyers and sellers carry out exchange (not perfect) Market failure Caused by market power (monopolies) or externalities (unintended consequences) Adam Smith "The father of Economics" - wrote the 'Wealth of Nations' in 1776 and first described the 'Invisible Hand' Invisible Hand Master01 | October, 2024/2025 | Latest update 1 | P a g e | © copyright 2024/2025 | Grade A+ Self-regulating nature of the marketplace - leaving the economy alone helps peoples' best interest in the long run, moving as such The circular flow diagram Labor Factors of production The production possibilities frontier demonstrates opportunity cost - a point laying on the curve is economically efficient, it means that we are using our resources wisely A shift in the PPF A technological advance or shift in production makes a product more attainable Microeconomics the study of how households and firms make decisions and how they interact in markets Master01 | October, 2024/2025 | Latest update 1 | P a g e | © copyright 2024/2025 | Grade A+ Macroeconomics the study of economy-wide phenomena, including inflation, unemployment, and economic growth Positive Statements Statement of fact that is descriptive and can be proven or disproven Normative Statements Claims that are subjective and prescriptive Absolute Advantage Producing a good using fewer inputs than another producer competitive markets markets that have many buyers and sellers so that no single buyer or seller can influence the price ImPorTEN Master01 | October, 2024/2025 | Latest update 1 | P a