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Questions and Answers
What is scarcity?
What are economic resources?
What is ceteris paribus?
What is rational decision making?
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What is the difference between positive and normative analysis?
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Study Notes
- Economics is the study of how individuals and societies allocate scarce resources.
- Scarcity is the fact that there are limited resources to satisfy unlimited wants.
- Economic resources are land, labor, capital, and entrepreneurship.
- Models are graphical and mathematical tools used to understand complicated economic processes.
- Ceteris paribus means "all else equal" in Latin.
- Agents make decisions based on incentives.
- Rational decision making assumes agents use all available information to make themselves as well off as possible.
- Positive analysis is analytical thinking about objective facts and cause-and-effect relationships that are testable.
- Normative analysis is subjective thinking about what we should value or a course of action that should be taken.
- Microeconomics studies the interactions of buyers and sellers in markets, while macroeconomics studies the overall output and health of nations.
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Description
Test your understanding of basic economic concepts with our quiz! From scarcity and resources to models and decision-making, this quiz covers the fundamentals of economics. Learn about microeconomics and macroeconomics, and differentiate between positive and normative analysis. Impress your friends and colleagues with your knowledge of economic terms and concepts. Take the quiz today!
