Economics Chapter 1 Section Reviews
what idea did Menger propose that radically changed the way economist should determine an objects value?
menger proposed that an individuals decision are based on personel utility.
what is the difference between microeconomics and macroeconomics? Give examples of each
microeconomics deals with the choices made by individual units, while macroeconomics deals with large scale economic choices. Examples will vary
what character quality is essential for the Christian to have victory over insatiability? Explain
Contentment. Being content means that you are satisfied with what God has provided, and being satisfied frees you from the struggle of insatiability versus scarcity by not choosing
what is economics?
Economics is the common-sense science of how and why people, businesses, and governments make the choices they do
explain and give an example of any three of the following: good, service, free good, nuisance good, economic good, economic service, free service
answer will vary
you must choose between going to bed at your regular time or staying up late to study. What would be the opportunity costs and benefits of this decision?
answer will vary
What is the difference between an economic cost and an opportunity cost?
economic cost is the value people place on a good or service and is reflected by its price. Opportunity cost is the satisfication a person gives up or the regret he experiences by not choosing differently
What two contradictory ideas result in the necesity of choice? Explain and define each.
insatiability and sarcity. Insatiability means that everyone has unlimited eants, and scarcity means that everything is finite or limited
What is the difference between intrinsic value and subjective value?
intrinsic value is the value a person believes a product to have because of its nature, its scarcity, and the amount of labor required to produce it. Subjective value is the value of a product based solely upon the opinion of the buyer
what is the difference between positive and normative economics. Give examples
positive economics entails observing economic choices and predicting economic events, while normative economics entails making value judgements about existing economic policies. Examples will vary
