Ch. 1

Question 1

Study of how individuals or societies choose to use scarce resources that nature and previous generation has provided

Answer 1

Economics

Question 2

Best alternative which is forgone or given up while making a choice

Answer 2

Opportunity Cost

Question 3

Analysis of benefits or costs arising from a choice in additional or incremental terms

Answer 3

Marginalism

Question 4

Market in which opportunities of profit are used up instantaneously

Answer 4

Efficient Market

Question 5

Branch of economics which deals with individuals level decision making units such as a firm, an industry or a household

Answer 5

Microeconomics

Question 6

Branch of economics which deals with economic behavior of aggregates- income, employment, output, price- on a national level

Answer 6

Macroeconomics

Question 7

Deals with understanding economic behavior and operations of economic systems without making judgments

Answer 7

Positive Economics

Question 8

Approach which analyzes economic outcomes and evaluates them as good or bad; Economic policies are part of Normative Economics

Answer 8

Negative Economics

Question 9

Measure that can change from time to time or from observation to observation

Answer 9

Variable

Question 10

Method of analysis in which effect of a variable is measured on another variable while keeping everything else unchanged

Answer 10

Ceteris Paribus or All Else Equal

Question 11

Producing most at least possible cost

Answer 11

Efficiency

Question 12

Increases in total output of useful goods

Answer 12

Economic Growth

Question 13

Condition where output is growing steadily with little fluctuation in price and employment

Answer 13

Stablility