eco quiz 2

Question 1

Normative economics

Answer 1

focuses on the value of economic fairness, or what the economy “should be” or “ought to be.”

• based on value judgments.

Question 2

Positive economics

Answer 2

the study of economics based on objective analysis of what is occurring and what has been occurring in an economy.

• based on facts

Question 3

microeconomics

Answer 3

studies the behavior of individuals, households and firms in decision making and allocation of resources.

Question 4

macroeconomics

Answer 4

the branch of economics that deals with the structure, performance, behavior, and decision-making of the whole, or aggregate, economy.

Question 5

Pareto efficient

Answer 5

when resources and goods are allocated to the maximum level of efficiency, and no change can be made without making someone worse off.

Question 6

correlation

Answer 6

a statistic that measures the degree to which two variables move in relation to each other.

Question 7

causation

Answer 7

indicates that one event is the result of the occurrence of the other event. (cause & effect)