CEA Cheat Sheet 2026

The 30 highest-yield CEA facts, distilled from real exam questions. Print it, save it as a PDF, or study it here — free, no sign-up.

1. What does standard deviation measure? → Variation or dispersion
2. The Coase Theorem states that externalities can be resolved efficiently through private negotiation when which condition holds? → Property rights are well-defined and transaction costs are negligible
3. Which concept in behavioral economics describes the tendency for individuals to weigh losses more heavily than equivalent gains? → Loss aversion
4. What is the purpose of a scatter plot? → Visualize variable relationships
5. If the price of a product increases by 10%, and the quantity demanded decreases by 15%, the price elasticity of demand for this product is: → Elastic
6. Why is consumer behavior analysis important? → Tailor products to preferences
7. The kinked demand curve model of oligopoly is used to explain which market phenomenon? → Price rigidity, where firms are hesitant to change prices.
8. Which of the following is the best example of an automatic stabilizer in fiscal policy? → A progressive income tax system where revenues fall as incomes decline during a downturn.
9. What is market equilibrium? → Demand equals supply
10. What is an industry analysis? → Examining industry factors
11. Which of the following is a key characteristic that distinguishes a monopoly from a perfectly competitive market? → Significant barriers to entry.
12. What does 'hyperbolic discounting' describe in behavioral economics? → Preference for immediate rewards that leads to time-inconsistent choices
13. What is a 'negative externality' in environmental economics? → A cost imposed on a third party not involved in the economic transaction
14. How does the 'framing effect' influence economic decision-making? → The same information presented differently leads to different choices
15. In natural resource economics, what is the 'Hotelling Rule' for nonrenewable resource extraction? → The optimal extraction path requires the resource price to rise at the rate of interest
16. What is a hypothesis test used for? → Test claims about populations
17. What is market segmentation? → Dividing market into groups
18. How does scenario analysis aid economic forecasting? → Consider multiple futures
19. What role do economic trends play in market analysis? → Provide context on market conditions
20. What is elasticity of demand? → Sensitivity of demand to price
21. The 'disposition effect' in behavioral finance describes which investor tendency? → Selling winning assets too early and holding losing assets too long
22. Which behavioral finance concept describes investors mimicking the actions of a larger group, often inflating asset bubbles? → Herding behavior
23. What does the term 'sample size' refer to? → Number of data points collected
24. What does the law of demand state? → Demand decreases as price increases
25. What is opportunity cost? → Value of the foregone alternative
26. Why is competitive analysis important? → To inform strategic decisions
27. Which model is commonly used for economic forecasting? → Time series models
28. What is comparative advantage? → Producing at lower opportunity cost
29. Which concept describes the economic value people place on a resource even if they never intend to use it, simply because it exists? → Existence value (non-use value)
30. Skill-biased technological change (SBTC) is primarily associated with: → Rising wage inequality as technology increases relative demand for high-skilled labor