CHAPTER 7 RATIONAL DECISION MAKING

Question 1

Economic welfare

Answer 1

The level of well- being or prosperity or living standards of an individual or group of individuals such as a country.

Question 2

Macroeconomics

Answer 2

The study of the economy as a whole, including inflammation, growth and unemployment.

Question 3

Microeconomics

Answer 3

The study of the behavior of individuals or groups such as consumers, firms or workers, typically within a market context.

Question 4

Neo-classical theory

Answer 4

A theory of economics which typically starts with the assumptions that economic agents will maximize their benefits and act rationally, and which develops how resources will be allocated in markets and at what price through the force of demand and supply; the margin is a key concept in neo-classical theory.

Question 5

Utility or economic welfare

Answer 5

The satisfaction or benefit derived from consuming a good or set of goods