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Questions and Answers
Which of the following best describes the foundation of economics?
Which of the following best describes the foundation of economics?
- The study of how governments control the distribution of wealth
- The study of how to eliminate poverty through social welfare programs
- The study of how individuals and societies allocate scarce resources to satisfy unlimited wants (correct)
- The study of how to maximize profits in a market economy
What is the primary focus of microeconomics?
What is the primary focus of microeconomics?
- Government policies and regulations
- Macroeconomic indicators and fiscal policy
- National economies and international trade
- Individual economic units and markets (correct)
What does the 'ceteris paribus' assumption in economics refer to?
What does the 'ceteris paribus' assumption in economics refer to?
- The assumption that demand for a product will always decrease as its price increases
- The assumption that other relevant factors remain constant when analyzing the impact of a specific variable (correct)
- The assumption that government intervention always improves market efficiency
- The assumption that economic theories only apply in certain geographical areas
