Chapter 1 - Economics As A Science

Question 1

authority that makes all of the economic decisions in an economic system

Answer 1

centralized command

Question 2

individuals trade items in this economic system

Answer 2

price system

Question 3

aggregate means

Answer 3

total

Question 4

people don’t make bad economic decisions on purpose

Answer 4

rationality assumption

Question 5

blank and blank are based on assumptions

Answer 5

models, theories

Question 6

nothing changes except the factors being studied

Answer 6

Ceteris Paribus Assumption

Question 7

you can only change one blank at a time with the ceteris paribus assumption

Answer 7

variable

Question 8

economics is a blank science

Answer 8

empirical

Question 9

blank are useful if they predict economic phenomena

Answer 9

models

Question 10

approach to the study of consumer behavior that emphasizes psychological limitations and complications that may interfere with rational decision making

Answer 10

behavioral economics

Question 11

hypothesis that people are nearly but not fully rational

Answer 11

bounded rationality

Question 12

bounded rationality states that people cannot examine every blank available to them and they appear to use blank to sort alternatives

Answer 12

choice, rule of thumb

Question 13

purely descriptive statement or scientific predictions such as If A, then B… a statement of what is

Answer 13

positive economics

Question 14

analysis involving value judgments; relates to whether things are good or bad and is a statement of what ought to be

Answer 14

normative economics

Question 15

the U.S. corporate tax is the blank highest in the world

Answer 15

second