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Chapter 1-3 Intro to Microeconomics questions with answers
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Chapter 1-3 Intro to Microeconomics questions with answers
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Chapter 1-3 Intro to Microeconomicsquestions with answers.
Economic Agent ANS -An individual or group that makes choices.
Scarce Resource ANS -A resource that people want, in which the quantity people demand exceeds the
quantity that is available.
Scarcity ANS -Condition that arises due to the fact people have unlimited wants in a world of limited
resources.
Economics ANS -The study of how agents choose to allocate scarce resources and how those choices
affect society.
Positive Economics ANS -Description which refers to or analyzes what has happened, predicting what
will happen, or what agents actually do; an objective statement which can be tested using data.
Normative Economics ANS -Description which refers to recommending what agents ought to do;
subjective statements/ judgements rooted in feeling, taste, and opinion.
Microeconomics ANS -The study of how individuals, households, firms, and governments make choices,
how these choices affect prices, the allocation of resources, and the well-being of other agents.
Macroeconomics ANS -The study of the economy as a whole.
The Three Principles of Economics ANS -1. Optimization
2. Equilibrium
3. Empiricism
Optimization ANS -All choices by all economic agents are tied together by this; Choosing the best
feasible option, given the available information.
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