Chapter 1 Principles Of Microeconomics

Question 0

Principle 2 The cost of something is what you give up to get it

Answer 0

Opportunity cost whatever must be given up to obtain it

Question 1

Principle 1: People face trade offs

Answer 1

Getting the most of scarce resources

Distributing prosperity fairly

Question 2

Principle 3 rational people think at the margin

Answer 2

Marginal changes adjustments to the plan

Question 3

Principle 4 people respond to incentives

Answer 3

Something that induces a person to act

Higher cig tax

Question 4

Principle 5 trade can make everyone better off

Answer 4

Specializing in certain goods or products

Question 5

Principle 6 markets

Answer 5

Markets are usually a good way to organize economic activity

Question 6

Principle 7 government involvement

Answer 6

Enforce property rights, promote efficiency

Question 7

Principle 8 standard of living

Answer 7

A country’s standard of living depends on its ability to produce goods & sevices

Question 8

Principle 9 Prices rise when the government prints too much money

Answer 8

Inflation

Question 9

Principle 10 society faces a short-term trade off between inflation and unemployment

Answer 9

More money means more demand for goods and services
Higher demand may cause firms to raise their prices
More hiring means more employment