Econ Chapter 1 Module

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

If the president of Columbia commented that "we should do something to reduce inflation in Columbia," this would be an example of?

A normative statement

In economic terms, what is the total amount of some good or service?

Aggregate

Using real world data to test a hypothesis is known as?

An empirical test

deals with the fact that individual choices can be affected by psychological limitations?

Behavioral economics

The hypothesis that people cannot always make completely rational decisions by examining every possible choice but instead use of rules of thumb to guide them is known as?

Bounded rationality

Economic models often simplify the real world by holding all things equal and changing one variable to determine the impact of the change. The "all things equal" assumption is also known as?

Ceteris paribus

A centrally planned economy is also referred to as a?

Command and control economy

According to the rationality assumption, people?

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

Understanding economics can help policymakers devise strategies to do all of the following except?

Eliminate climate change

Macroeconomics can be used to understand all of the topics listed below, except?

How a consumer decides between the purchase of two different cars.

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?

Which of the following is a positive economic statement?

If minimum wage rates rise, then unemployment will rise.

Economics?

Is concerned with how people respond to incentives.

Which of these covers the study of topics such as inflation and unemployment?

Macroeconomics

__________ is the study of how households and businesses make choices, how they interact in markets, and how government influences their choices.

Microeconomics

Which of the following are not essential components of an economic model?

Normative statements

Which of these is NOT an essential component of an economic model?

Normative statements

Which of the following countries has an economy where most of the resource allocation is determined by a central planning authority?

North Korea

One basic underlying principle in economics is that?

People respond to incentives

Macroeconomics is concerned with all of the following except?

Political party affiliation

Economics is the study of choice under conditions of?

Scarcity

Which of these is a macroeconomic study?

The study of how fast prices in general are rising.

Macroeconomics focuses on which of the following topics?

Unemployment, inflation, growth, and trade