eco 2023 final exam || with 100% Verified Solutions.

economics correct answers study of how we make choices under scarcity choice correct answers the act of selecting among alternatives scarcity correct answers the concept that there is less of a good freely available from nature than people would like -not the same thing as poverty -necessitate rationing-price is used -leads to competitive behavior rationing correct answers allocating scarce goods to those who want them resources correct answers an input that is used to produce an economic good 1. human resources 2. physical resources 3. natural resources capital correct answers human made resources used to produce other goods and services 8 guideposts to economic thinking correct answers 1. resources are scarce so decision makers must make trade-offs 2. individuals are rational 3. incentives matter 4. individuals make decisions at the margin 5. information helps us make better choices but is costly 6. beware of secondary effects:economic actions generate both direct and indirect effects 7. the value of a good or service is subjective 8. the test of a theory is its ability to predict opportunity cost correct answers highest valued alternative that must be sacrificed when choosing an option marginal correct answers describes the effect of a change in the current situation; ex: supersizing meals cost benefit analysis correct answers one will undergo an action when the marginal benefits outweigh the marginal costs secondary effect correct answers the indirect impact of an event or policy that may not be easily and immediately observable; ex: tax or trade restrictions positive economics correct answers testable normative economics correct answers not testable