12 Questions
What is the best example of making decisions at the margin?
C. Pekkei was not planning to attend college this semester, but then she decides to take 12 units worth of classes.
Which key concept in economics is best represented by the economist's observation about the tax increase on cigarettes?
B. Looking for unintended effects
What is a condition often used in economics to isolate the relationship between two variables?
Ceteris paribus
What is the best way to evaluate a theory?
According to how well it predicts.
In economics, what does the attempt to determine 'what is' always involve?
Positive economics
Define the term 'Utility' in the context of economics.
Satisfaction or happiness derived from consuming a good or service.
What does the term 'Efficiency' refer to in economics?
Maximizing output with given inputs or minimizing inputs to produce a given output.
Explain the concept of 'Abstraction' in economics.
The process of removing characteristics from a model to simplify it.
What type of issues does macroeconomics focus on?
Macroeconomic issues
Which branch of economics deals with individual markets and decision-making units?
Microeconomic issues
Differentiate between positive economics and normative economics.
Positive economics deals with facts and 'what is', while normative economics deals with opinions and 'what should be'.
What role does mathematics play in evaluating economic theories?
The level of mathematics within the theory is not the sole criteria for evaluation.
Test your understanding of factors that bring movement along demand curves and factors that can shift demand curves. Determine what factors lead to movements up or down a given demand curve for specific goods.
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