Chapter 1 - The Principles and Practice of Economics

An example of subjective judgement would be:

All answers are subjective judgements.

According to the rationality assumption, people:

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

What is the study of macroeconomics:

The study of how fast prices in general are rising.

Economic activities that are feasible have what characteristics:

affordable and available: Feasible options are all those choices that are available and affordable. A buyer must be willing and able to pay a price. A seller must be willing and able to accept a price. The best options are contained in the feasible options.

according to the rationality assumption people:

do not intentionally make decisions that would leave them worse off

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

no- how a consumer decides between the purchase of two different cars yes- what causes economic booms and recessions yes- national unemployment trends yes- how the national economy works\

the principle of opportunity cost evolves from the concept of:

scarcity

cost that cannot be recovered and therefore aren't relevant to a decision for a future activity are called-------- costs.

sunk

A definition of opportunity cost is:

the value of best thing thing that you give up to get something else.

People are fundamentally good

this a a normative statement

Analyzing data or evidence is called:

Empiricism

When an investment counselor advises a client as to the risk / return trade-off on an investment, this type of help is called ===== economics

Prescriptive When economic analysis is used to help individual economic agents choose what is in their personal best interest, this type of normative economics is referred to as prescriptive economics.