chapter 1 homework

_____ is the study of the choices people make to attain their goals, given their scarce resources

Economics

Trade-offs force society to make choices , particularly when answering the following three fundamental questions

One, what goods and services will be produced? Two, how will the goods and services be produced? Three, who will receive the goods and services produced?

_______ occurs when a good or services is produced at the lowest possible cost. ______ occurs when production is in accordance with consumer preferences

Productive efficiency , Allocative efficiency

One of the basic facts of life is that people must make choices as they try to attain their goals. This unavoidable fact comes from a reality an economist calls

Scarcity

Microsoft charges a price of $599 for a copy of Windows 7. Is this pricing decision rational

When we assume the managers at Microsoft have used all available information and have weighed all known benefits and costs, we are assuming rationality.

A market is a group of ______ of a good or service and the institution or arrangement by which they come together to trade

buyers and sellers

societies organize their economies in two main ways to answer the three questions of what, how and who. A society can have a ____ economy in which the government decides how economic resources will be allocated. Or a society can have a _____ economy in which the decisions of households and firms interacting in markets allocate economic resources

centrally planned, market

Firms choose how to produce the goods and services they sell. In many cases, firms face a trade-off between using more workers or using more machines. for example

many times in the past several decades, firms may have chosen between a production method in the United States that uses fewer workers and more machines and a production method in China that uses more workers and fewer machines.

Economists use the word marginal to mean an extra or additional benefit or cost of a decision. an optimal decision occurs when

marginal benefit equals marginal cost

a ______ economy is an economy in which most economic decisions result from the interaction of buyers and sellers in markets but in which the government plays a signigicant role in the allocation of resources

mixed

equity is

the fair distribution of economic benefits

Opportunity cost is

the highest valued alternative that must be give up to engage in an activity

when the federal government crafts environmental policies that make it less expensive for firms to follow green initiatives

the policies are consistent with economic incentives

A market system prevents people from getting as many goods and services as they want due to which of the following?

their income