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FREE ECONOMICS AND STUDY GAMES ABOUT ECON 210
FINAL EXAM EXAM QUESTIONS
Qs and Ans Expert- Explanation
This Exam contains:
-Guarantee passing score -5 Questions and Answers -format set of multiple-choice -Expert- Explanation
Question 1: What is incentive? Give one real life example.
Answer:
Definition: You can have a positive or negative incentive. They can make a person want to do something more or less and it can make the opportunity cost larger or smaller.
Example: Sleep vs making exam
Question 2: What is GDP? How is GDP calculated using the expenditure approach? What is CPI?
Answer:
GDP- Gross Domestic Product : Sum of market value of G&S in a country with in a certain amount of time
Expenditure Approach: C+I+G+Nx
Nx = exports-imports
CPI - consumer price index: sum of basket G&S of a n individual/household
Question 3: Explain the problem of "double counting" and how it can be avoided.
Answer:
counting a G&S twice
we can this by only counting NEW things
Question 4: What are the limitations of GDP measures?
Answer:
- GDP doesn't measure the cost of living/quality of life
- GDP doesn't measure if someone has a job
- GDP doesn't measure economic activities
Question 5: What is opportunity cost? Give a real life example.
Answer:
Definition: value of opportunities lost when making a decision
Example: When you are given two options to pick from the one you didn't pick is the opportunity cost
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