18 Questions
What is the main focus of marginal analysis?
Analyzing decisions made at the margin
How is economic surplus calculated?
By subtracting costs from benefits
In the context of individual choice, what is an incentive?
A reward for changing behavior
What does the concept of a 'marginal decision' refer to?
Deciding to do a bit more or a bit less of an activity
According to economic principles, what is the relationship between costs and benefits?
Not incurring a cost is equivalent to gaining a benefit
When deciding whether to charge interest on a loan, what principle should be considered?
Opportunity cost of the lender's money
Which term refers to the educational achievements and skills of the labor force that increase labor productivity?
Human capital
In economics, what does equilibrium refer to?
A situation where no individual would be better off doing something different
What concept involves taking all opportunities to improve some people's well-being without harming others?
Efficiency
Which situation occurs when equity is prioritized over efficiency?
Disabled parking space offerings
What do markets usually tend to lead to, according to the text?
Efficiency
Which term describes the economic situation in which no individual would be better off by choosing a different course of action?
Equilibrium
What principle suggests that people usually respond to incentives to make themselves better off?
Principle of incentives
In which situation would you expect waiters to be more attentive according to the text?
In a country where tips are automatically added to the bill
Which economic concept is derived from the idea that trade allows individuals to consume more than they otherwise could?
Gains from trade
What was the problem with the incentive system at the juvenile prison in Pennsylvania as mentioned in the text?
Judges receiving bribes for sending more young people to jail
Who argued against the Corn Laws in the British Parliament and introduced the theory of comparative advantage?
David Ricardo
Which concept suggests that each country should specialize in producing goods where they have a lower opportunity cost compared to other countries?
Comparative advantage
Test your knowledge on economic principles and incentive systems by answering questions about how people respond to incentives and the impact of different incentive systems on behavior. Explore scenarios like tipping practices in the US and Europe, and analyze the effectiveness of incentive systems in a juvenile prison.
Make Your Own Quizzes and Flashcards
Convert your notes into interactive study material.
Get started for free
