Introduction

Question 1

Microeconomics

Answer 1

The choices that individuals and firms make and how these interact in the market

Question 2

Macroeconomics

Answer 2

Study of the performance of national and global economics

Question 3

What is the opportunity cost?

Answer 3

The highest valued alternative that must be given up for something

Question 4

Marginal benefit

Answer 4

Benefit of pursuing an incremental increase in an activity

Question 5

Marginal cost

Answer 5

the opportunity cost of pursuing an increase in an activity

Question 6

What is the term for comparing marginal benefits and costs?

Answer 6

Marginal analysis

Question 7

What is productive efficiency?

Answer 7

A product is produced at the lowest possible cost due to competition

Question 8

What is allocative efficiency?

Answer 8

Markets uses scarce resources to produce and products meet the demands and desires of society

Question 9

What is voluntary exchange?

Answer 9

The transaction benefits the buyer and seller

Question 10

What are the 2 main causes of market failure?

Answer 10

Externalities and market power

Question 11

What is production efficiency?

Answer 11

Cannot produce more of 1 good without producing less of another