10 Principles of Econ

Question 1

The study of how society managed its scarce resources.

Answer 1

Economics

Question 2

The principles of economics study___.

Answer 2

how people make descisions

Question 3

People face tradeoffs.

Answer 3

Principle 1

Question 4

All decisions involve tradeoffs.

Answer 4

Principle 1

Question 5

Society faces the trade off of:

Answer 5

efficiency versus equality

Question 6

Society gets the most from its scarce resources.

Answer 6

Efficiency

Question 7

Prosperity is distributed uniformly among society’s members.

Answer 7

Equality

Question 8

to achieve greater equality, could redistribute income from the wealthy to the poor.

Answer 8

Tradeoff

Question 9

___reduces incentive to work and produce.

Answer 9

tradeoff

Question 10

The cost of something is what you give up to get it.

Answer 10

Principle 2

Question 11

Making decisions requires comparing the costs and benefits of alternative choices.

Answer 11

Principle 2

Question 12

the opportunity cost of any item is (principle 2)

Answer 12

what ever is given up to obtain it

Question 13

Rational people think at the margin.

Answer 13

Principle 3

Question 14

___systematically and purposefully do the best they can to achieve objectives.

Answer 14

rational people

Question 15

___make decisions by evaluating the cost and benefits of marginal changes.

Answer 15

rational people

Question 16

People respond to incentives

Answer 16

Principle 4

Question 17

an ____ is something that induces a person to act.

Answer 17

incentive

Question 18

Incentives are part of principle___

Answer 18

4

Question 19

rational people respond to____

Answer 19

incentives

Question 20

trade can make everyone better off

Answer 20

principle 5

Question 21

principle 5: specialization over ____

Answer 21

self sufficiency

Question 22

Markets are usually a good way to organize economic activity.

Answer 22

principle 6

Question 23

Markets are a good way to coordinate trade.

Answer 23

principle 6

Question 24

group of buyers and sellers

Answer 24

market

Question 25

a ___ economy allocates resources through decentralized decisions of many households and firms as they interact.

Answer 25

market

Question 26

“act as if led by an invisible hand”

Answer 26

Adam Smith

Question 27

said that individuals are better off specializing in what they do best.

Answer 27

Adam Smith

Question 28

interactions of ___ determines prices.

Answer 28

buyers/sellers

Question 29

each price reflects a goods value to ___ and the ___ ___ ___.

Answer 29

buyers, cost of production

Question 30

The invisible hand works through the ___ ___.

Answer 30

price system

Question 31

Governments can some times improve market outcomes

Answer 31

principle 7

Question 32

the government enforces property rights

Answer 32

principle 7

Question 33

market failure

Answer 33

fails to allocate societies resources efficiently

Question 34

a country’s standard of living depends on their ability to produces goods/services

Answer 34

principle 8

Question 35

___ is the ultimate source of living standards

Answer 35

productivity

Question 36

_____ is the ultimate source of inflation.

Answer 36

money growth

Question 37

amount of goods/services produces per unit of labor

Answer 37

productivity

Question 38

Prices rise when the government prints too much money.

Answer 38

Principle 9

Question 39

The increase of the general level of prices.

Answer 39

Inflation

Question 40

society faces a short-run trade off between inflation and unemployment.

Answer 40

Principle 10