Economics

Question 1

the social science that studies the choices that individuals, businesses, governments, and societies make as they cope with scarcity and the incentives that influence and reconcile those choices

Answer 1

economics

Question 2

the rational, analytical study of the way society uses its available resources to satisfy its wants

Answer 2

economics

Question 3

things of value which society possess

Answer 3

resources

Question 4

desire for a thing

Answer 4

want

Question 5

desire + ability and willingness to pay for something

Answer 5

Demand

Question 6

necessity

Answer 6

need

Question 7

reward

Answer 7

incentive

Question 8

everything for which a want must go unfulfilled; our inability to satisfy all our wants

Answer 8

scarcity

Question 9

lack of enough resources to satisfy all desired uses of those resources
–there aren’t enough resources available to satisfy all our desires

Answer 9

scarcity

Question 10

Scarcity of resources limits the amount of good and services that can produced

• -somebody’s wants will have to go unfulfilled
• —–whose?
• -scarcity requires economic choices to be made
• —–who will decide?

Answer 10

Scarcity: the core problem

Question 11

a product which satisfies want

Answer 11

good

Question 12

an action performed for someone’s benefit

Answer 12

service

Question 13

something that does not require giving something up to obtain it

Answer 13

free good

Question 14

you can think of every choice as a_____
an exchange
giving up one thing to get something else

Answer 14

tradeoff

Question 15

when we choose to use resources to produce one thing, we must give up producing something else with those resources. This tradeoff comes with a cost

Answer 15

…

Question 16

the value to you of the next most desired good forgone to obtain some other higher- priority good
–what is given up to undertake a chosen activity

Answer 16

opportunity cost

Question 17

What must be given up to obtain an item

What must be foregone to obtain something

Answer 17

Opportunity cost

Question 18

Thinking about a choice as a tradeoff emphasizes cost as an opportunity forgone.
The highest-value alternative that we give up to get something is the ___ of the activity chosen

Answer 18

opportunity cost

Question 19

current level of activity

Answer 19

margin

Question 20

the value places on an extra (one more) unit of an item

Answer 20

marginal benefit

Question 21

the value of the sacrifice made to obtain an addition unit of an item

Answer 21

marginal cost

Question 22

People make choices at the margin, which means that they evaluate the consequences of making incremental changes in the use of their resources

Answer 22

….

Question 23

the benefit from pursuing an incremental increase in an activity is its

Answer 23

marginal benefit

Question 24

the opportunity cost of pursuing an incremental increase in an activity is its

Answer 24

marginal cost

Question 25

occurs when individuals seek net gains by undertaking actions for which marginal benefit exceeds marginal cost

Answer 25

rational behavior

Question 26

when marginal benefit exceeds marginal cost of an activity, a rational person will undertake more of that activity

Answer 26

…

Question 27

our choices respond to incentives
for any activity, if marginal benefit exceeds marginal cost, people have an incentive to do more of that activity
if marginal cost exceeds marginal benefit, people have an incentive to do less of that activity
incentives are also the key to reconciling self-interest and the social interest

Answer 27

responding to incentives

Question 28

When the marginal benefit outweighs the marginal cost ____.

MB>MC means…

Answer 28

the decision will be yes!

Go for it!

Question 29

When the marginal cost outweighs the marginal benefit____

MC>MB means…

Answer 29

the decision will be no!

avoid it!

Question 30

scarcity

Answer 30

requires choices

Question 31

Resources are scarce or limited
wants are insatiable
over time wants change and multiply
objective of economic study is to satisfy these wants

Answer 31

economizing problem

Question 32

to isolate the effect of interest economics use the logical devise called ceretis paribus “other things being equal”

Answer 32

…