Principles Of Economics

Question 1

Economic Principle 1 How people make decisions

Answer 1

People face trade offs.

Question 2

Economic Principle 2 How people make decisions

Answer 2

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

Question 3

Economic Principle 3 How people make decisions

Answer 3

Rational people think at the margin

Question 4

Economic Principle 4 How people make decisions

Answer 4

People respond to incentives

Question 5

Economic Principle 5 How people interact

Answer 5

Trade can make everyone better off

Question 6

Economic Principle 6 How people interact

Answer 6

Markets are usually a good way to organize economic activity

Question 7

Economic Principle 7 How people interact

Answer 7

Governments can sometimes improve market outcomes.

Question 8

Economic Principle 8 How the Economy as a whole works

Answer 8

A country’s standard of living depends on its ability to produce goods and services.

Question 9

Economic Principle 9 How the Economy as a whole works

Answer 9

Prices rise when the government print too much money.

Question 10

Economic Principle 10 How the Economy as a whole works

Answer 10

Society faces a short-run trade-off between inflation and unemployment.