PSU Econ 102 Exam 1 Latest Update 2024-2025 Actual Exam from Credible Sources with 115 Questions and 100% Verified Correct Answers Guaranteed A+ Verified by Professor
Absolute Advantage - CORRECT ANSWER: Ability of a country to produce more of a
good than competitors, using the same amount of resources
Ceteris Paribus - CORRECT ANSWER: "Holding all else constant"
(assuming all other variables do not change)
Club Good - CORRECT ANSWER: Excludable & Non-Rival
Ex: Cable TV, Direct TV
Coase Theorem - CORRECT ANSWER: If there are no barriers to negotiations, and if property rights are fully specified (well-defined), interested parties will bargain to correct any externalities
Common-Resource Good - CORRECT ANSWER: Non-Excludable & Rival
Ex: Fishing, Hunting, Free LOOP service
Comparative Advantage - CORRECT ANSWER: Ability of a county to produce a good at a lower opportunity cost than competitors
Complements - CORRECT ANSWER: Used together
Consumer Surplus - CORRECT ANSWER: Difference between the willingness to pay
for a good and the actual price paid to get it
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Deadweight Loss - CORRECT ANSWER: Resulting loss of total surplus due to market
failure
Downward Sloping Demand - CORRECT ANSWER: Substitution Effect - relatively more
expensive compared to other products Income Effect - takes up larger share of income
Economic Model - CORRECT ANSWER: Simplification of a complex portion of the
economy (Underlying assumptions)
Economic Variable - CORRECT ANSWER: Something measurable that can take on
different values
Ex: the price of an orange or income of a teacher
-Endogenous (within model) or Exogenous (outside model)
Economics - CORRECT ANSWER: Study of the choices people make to attain their
goals, given their scarce resources
Excise Tax - CORRECT ANSWER: Tax levied on a particular good or service
Ex: Alcohol, Gasoline, Cigarettes
Excludable - CORRECT ANSWER: Consumer must purchase to use
External Benefits - CORRECT ANSWER: Benefits of a market activity received by
people who are not participants
External Costs - CORRECT ANSWER: Costs of a market activity paid by people who
are not participants
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