10 Basic Principles of Economics Quiz

People Face ______ Due to scarcity, individuals must make choices and trade-offs between competing alternatives.

Gaining something requires giving up something else. 'there ain’t no such thing as a free ______'

Classic trade-off is between 'guns and ______'

Another trade-off society faces are between efficiency and ______

Efficiency refers to the size of the economic pie and equality refers to how the pie is divided into individual ______

Opportunity Cost (The cost of something is what you give up to get it) - The cost of a decision is not only the explicit cost but also the value of the next best alternative that must be ______

College athletes who can earn millions if they drop out of school and play professional sports are well aware that their opportunity cost of attending college is very ______

Rational people – people who systematically and purposely do the best they can to achieve their objectives, given the available opportunities Economist use the term marginal change to describe the small incremental adjustment to the plan of ______

A rational decision maker takes an ______ if and only if the marginal benefit of the action exceeds the marginal cost

Understanding incentives is essential for predicting how people will ______

Changes in costs or benefits influence behavior and ______

Incentives are key in analyzing how ______ work