Ch 1 & 2

Economics promotes which of the following as the way to make the best decision

continue an enjoyable activity up to the point where its marginal benefit equals its marginal cost

the production of possibilities frontier model shows that

if all resources are fully and efficiently utilized, more of one good can be produced only by producing less of another good

marginal analysis involves undertaking an activity

only when its marginal benefits are positive

economists assume that

optimal decisions are made at the margin

what is an example of a normative economic statement

pharmaceutical manufacturers should not be allowed to patent their products so prescription drugs would be more affordable

__________ refers to the situation in which unlimited wants exceed limited resources

scarcity

what is an example of a positive economic statement

scarcity necessities that people make tradeoffs

economics is the study of the __________ people make to attain their goals, given their __________ resources

choices and scarce

An Inquiry into the Nature and Causes of the Wealth of Nations published in 1776 was written by

Adam Smith

An example of a factor of production is

the automobiles exported by an auto manufacturer

what are the three fundamental questions that any economy must address

what goods and services to produce, how will these goods and services be produced and who receives them