Econ 2301 Chapter 1 Quiz

According to the rationality assumption, people

Do not intentionally make decisions that would leave them worse off.

Economic decisions are made at every level in society. When we try to decide which production method to use among several alternatives, which of the following key economic questions are we trying to answer?

How do we produce the products?

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

------ is concerned with what is​, and -------is concerned with what ought to be. Economics is about,------- which measures the costs and benefits of different courses of action.

Positive analysis, normative analysis, positive analysis

In what type of economy does the government decide how economic resources will be allocated?

a centrally planned economy

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

__________ goods and services are those bought by businesses to be used to increase efficiency or enhance production.

capital

Which of the following is a positive economic statement

if minimum wage rate rise, then unemployment will rise

What is the name given to the development of a new good?

invention

Economics

is concerned with how people respond to incentives

Which of the following covers the study of topics such as inflation or​ unemployment

macroeconomics

Economists believe that an individual or firm should continue any activity unti

marginal benefit is equal to marginal cost

The United States economy is best classified as a

mixed economy

The resources provided by nature and used to produce goods and services are also known as

natural resources

----- occurs when a good or service is produced at the lowest possible cost. ------ occurs when production is in accordance with consumer preferences

productive efficiency, allocative efficiency

The principle of opportunity cost evolves from the concept of

scarcity

Economics is the study of

the choices people make to attain their goals, given their scarce resources

Opportunity cost is

the highest valued alternative that must be given up to engage in an activity

one of the basic facts of life is that people must make choices as they try to attain their goals. this unavoidable fact comes from a reality an economist calls

scarcity