scarcity Correct Answer-a situation in which unlimited wants exceed the limited resources available to fulfill those wants
economics Correct Answer-the study of the choices people make to attain their goals, given their scarce resources
economic model Correct Answer-a simplified version of re...
Econ 202 (Ch. 1-4) Questions with Correct Answers
scarcity Correct Answer-a situation in which unlimited wants exceed the
limited resources available to fulfill those wants
economics Correct Answer-the study of the choices people make to
attain their goals, given their scarce resources
economic model Correct Answer-a simplified version of reality used to
analyze real-world economic situations
market Correct Answer-a group of buyers and sellers of a good or
service and the institution or arrangement by which they come together
to trade
people are rational, people respond to incentives, optimal decisions are
made at the margin Correct Answer-What are the 3 key economic ideas?
marginal analysis Correct Answer-analysis that involves comparing
marginal benefits and marginal costs
trade-off Correct Answer-the idea that, because of scarcity, producing
more of one good or service means producing less of another good or
service
opportunity cost Correct Answer-the highest-valued alternative that must
be given up to engage in an activity
, what goods and services will be produced? how will the goods and
services be produced? who will receive the goods and services
produced? Correct Answer-what are the 3 fundamental questions that
society must make when making choices?
centrally planned economy Correct Answer-an economy in which the
government decides how economic resources will be allocated
market economy Correct Answer-an economy in which the decisions of
households and firms interacting in markets allocate economic resources
mixed economy Correct Answer-an economy in which most economic
decisions result from the interaction of buyers and sellers in markets but
in which the government plays a significant role in the allocation of
resources
productive efficiency Correct Answer-a situation in which a good or
service is produced at the lowest possible cost
allocative efficiency Correct Answer-a state of the economy in which
production is in accordance with consumer preferences
competition Correct Answer-How is productive efficiency achieved?
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