Introduction to Economics

<p>What is the impact of government spending on the overall rate of inflation? (B)</p> Signup and view all the answers

<p>Making the best possible choice given available information. (A)</p> Signup and view all the answers

<p>They drive choices because limited availability requires allocation decisions. (C)</p> Signup and view all the answers

<p>Because it highlights that every economic decision involves trade-offs due to scarcity. (B)</p> Signup and view all the answers

<p>The knowledge and beliefs that agents have about the available options. (B)</p> Signup and view all the answers

<p>To compare benefits and costs using a common unit of measurement. (A)</p> Signup and view all the answers

<p>An individual refusing to contribute to a public radio station but still listening to it. (A)</p> Signup and view all the answers

<p>Establishing causation allows for more accurate predictions and effective policy interventions. (D)</p> Signup and view all the answers

<p>It allows for focusing on the most relevant aspects of a complex phenomenon. (D)</p> Signup and view all the answers

<p>It can lead to an inaccurate understanding of cause-and-effect relationships. (C)</p> Signup and view all the answers

<p>In a controlled experiment, researchers assign subjects to treatment and control groups, while in a natural experiment, assignment occurs through external events. (C)</p> Signup and view all the answers

<p>Averaging data is useful as it summarizes a full set of cases and protects against outliers. (C)</p> Signup and view all the answers

<p>A situation in which nobody can benefit by changing his own behavior. (B)</p> Signup and view all the answers

<p>Number of rooms. (C)</p> Signup and view all the answers

<p>The best alternative use of a resource. (A)</p> Signup and view all the answers

<p>The cause and effect relationship is the opposite of what was initially assumed. (A)</p> Signup and view all the answers

<p>Social warfare. (B)</p> Signup and view all the answers

<p>y=mx+n (A)</p> Signup and view all the answers

<p>Calculate total net benefit (benefits – costs) for each option) (C)</p> Signup and view all the answers

<p>Calculate how the costs and benefits change as you move from option to another (D)</p> Signup and view all the answers

Economics studies how choices are made with scarce resources and their societal effects.

Groups or individuals that make choices about resource allocation.

Goods that are limited and cannot satisfy all wants.

Describes what economic agents actually do based on objective facts.

Determines what economic agents should do, involving subjective value judgments.

Study of individual, household, and firm choices affecting prices and resource allocation.

Study of the economy as a whole, focusing on aggregate issues like inflation and GDP.

Making the best choice possible based on available options and information.

Giving up something to gain something else during decision-making.

A limit on the choices available due to a limited budget.

The best alternative use of a resource when making a choice.

Method comparing benefits and costs of different choices in a common unit.

A situation where no one can benefit by changing their behavior.

When someone benefits from a choice without paying its cost.

Analysis using data to answer questions about the real world.

Correlation indicates relationship; causation implies direct effect.

Factors not considered that affect cause and effect relationships.

When the supposed effect actually causes the initial cause.

Calculation of total benefits minus total costs to find the net benefit.

Comparing the changes in net benefits from one option to another.

Visual representation of data to summarize information.

Steps for empirical analysis: model, hypothesis, test, refine.