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Question 0

Economics is the study of___

Answer 0

The choices people make to attain their goals, given their scarce resources

Question 1

When economists develop models designed to explain the choices people make, they generally assume that____

Answer 1

People are rational

Question 2

A market is a group of ___ of a good or service and the institution or arrangement by which they come together to trade.

Answer 2

Buyers and sellers

Question 3

Societies organize their economies in 2 main ways to answer the 3 questions of what, how & who. A society can have a ___ or a ___

Answer 3

• Centrally planned economy

* Market economy

Question 4

___ occurs when a good or service is produced at the lowest possible cost.

Answer 4

Productive efficiency

Question 5

___ occurs when production is in accordance with consumer preferences

Answer 5

Allocative efficiency

Question 6

Equity is ___

Answer 6

The fair distribution of economic benefits

Question 7

Opportunity cost is ___

Answer 7

The highest valued alternative that must be given up to engage in an activity

Question 8

Trade-offs force society to make choices when answering the following 3 questions:
1.
2.
3.

Answer 8

1. WHAT goods & services will be produced?
2. HOW will the goods & services be produced?
3. WHO will receive the goods & services produced?

Question 9

___ is concerned with WHAT IS, & ___ is concerned with WHAT OUGHT TO BE

Answer 9

• Positive analysis

* Normative analysis

Question 10

Economics is about ___ analysis, which measures the ___

Answer 10

• Positive analysis

* measures the costs & benefits of different courses of action

Question 11

Economics is a social science because ___

Answer 11

• it applies the scientific method to the study of the interactions among individuals
• considers human behavior – particularly decision-making behavior
• it’s based on studying the actions of individuals

Question 12

Macroeconomics is ___

Answer 12

The study of the economy as a whole, including topics such as inflation, unemployment & economic growth

Question 13

The primary difference between product markets & factor markets is that ___

Answer 13

Product markets are markets for goods
While factor markets are markets for factors of production – labor, capital, natural resources & entrepreneurial ability

Question 14

___ are the rights individuals or firms have to the exclusive use of their property, including the right to buy or sell it

Answer 14

Property rights

Question 15

In general, the term “ceteris paribus” means ___

Answer 15

All else equal

Question 16

A ___ is someone who operates a business, bringing together the factors of production– labor, capital, and natural resources– to produce goods & services

Answer 16

Entrepreneur

Question 17

In economic terminology, the inputs used to produce output are referred to as ___

Answer 17

Factors of production

Question 18

In a free market, the actions people take are largely determined by ___

Answer 18

The motivation of financial reward

Question 19

A ___ exists when the government places few restrictions on how a good or a service can be produced or sold or on how a factor of production can be employed

Answer 19

Free market