Chapter 1 Review Module
In what type of economy does the government decide how economic resources will be allocated?
A centrally planned economy
According to the rationality assumption, people:
Do not intentionally make decisions that would leave them worse off.
Tangible products like cars and televisions are referred to as __________
goods
What can you not understand from macroeconomics
how a consumer decides between the purchase of two different cars
Economics is concerned with:
how people respond to incentives
The resources provided by nature to produce goods and services are also known as:
natural resources
Jim declined to take part in a health study on a free basis but changed his mind after being offered $1,000 to participate in the study. Jim's behavior best illustrates which economic principle?
people respond to economic incentives
Economics is the study of choice under conditions of:
scarcity
When you think of an arrangement or institution that brings buyers and sellers of a good or service together, what are you thinking of?
A market
What is an example of a country that has an economy where most of the resource allocation is determined by a central planning authority?
North Korea
One of the first steps in deciding whether to complete your education is to:
evaluate the marginal cost and marginal benefit of that decision
What is the name given to the development of a new good?
invention
The principle of opportunity cost evolves from the concept of:
scarcity
What is not a possible opportunity cost of attending college?
the cost of housing