question
What are economic decisions based on?
answer
Our needs and wants, and our constraints
question
What is the most important thing to know about markets?
answer
There are interactions among different markets.
question
What is one important market to know?
answer
The labor market
question
What is economics?
answer
The study of how people make choices under scrutiny ad the results of these choices for society
question
What is the Scarcity Principle?
answer
People have unlimited wants and limited resources. Having more of one good thing means having less of another (tradeoff).
question
Which 4 things is scarcity involved in?
answer
Global warming, political elections, career choices, and buying bottled water
question
What is a decentralized market economy?
answer
Consumers and producers have a choice of how much to buy/make - not determined by government (US)
question
What is a centralized market economy?
answer
The government is involved in the production and consumption of goods.
question
What are 3 examples of constraints?
answer
Budget limits, space limits, time limits
question
What is the Cost-Benefit Principle?
answer
Take an action if and only if the extra benefits are at least as great as the extra costs.
question
What are 2 things that costs and benefits can be?
answer
Money and time
question
When marginal costs decrease, what happens to marginal benefits?
answer
They increase
question
What is the other term for the net outcome?
answer
The surplus
question
What is the Nominative Economic Principle?
answer
It says how people should behave.
question
What is the Positive Economic Principle?
answer
It predicts how people will behave.
question
What does microeconomics study?
answer
It studies choice and its implication for price and quantity in individual markets.
question
What is an example of topics microeconomics considers?
answer
Costs of production
question
What does macroeconomics study?
answer
It studies the performance of national economies and policies that governments use to try to improve performance.
question
What are 3 examples of topics macroeconomics considers?
answer
Monetary policy, deficits, and tax policy
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