HW 1
Which of the following is true regarding the concept of causation?
It describes how one event can bring about change in another.
For a market to be in equilibrium, three conditions must hold. Fill in the blanks below to complete these conditions.
The amount produced by sellers must be equal to the amount purchased by buyers. The costs of making a product must be less than the final price at which the product sells. Buyers must place a value on the uses of the product that is greater than the cost of buying the product.
Causation occurs when there is ____________.
a logical cause-and-effect relationship.
The statement that the U.S. government should increase carbon taxes to reduce carbon emissions that cause global warming is ___________.
a normative statement, since it describes what ought to be done and is therefore not possible to confirm with data.
Economics is divided into two broad fields of study: microeconomics and macroeconomics. Microeconomics studies _________, while macroeconomics studies _________.
a small piece of the overall economy; the economy as a whole.
The definition of economics states that it is the study of how _________
agents choose to allocate scarce resources and the impact of those choices on society.
Policy decisions made by the government are analyzed by _________.
both microeconomics and macroeconomics.
Empiricism describes a situation where
economists use data to analyze what is happening in the world
When economists test their theories using evidence-based analysis, they are most likely using __________.
empiricism
Equilibrium describes a situation where
no one would benefit from changing his or her behavior
Optimization describes a situation where
people weigh costs and benefits when making a decision
In equilibrium, everyone ___________.
simultaneously optimizes, so that nobody benefits by changing his or her own behavior.
the opportunity cost of an activity is a measure of
what is given up