10 Questions
What is the fundamental idea behind the principle 'There ain't no such thing as a free lunch'?
That everything has an opportunity cost
What is the primary problem that society faces?
Scarcity of resources
What is the concept that is illustrated by the example of a student deciding how to allocate time?
Rational choice theory
What is the trade-off faced by society in terms of national defense and consumer goods?
Guns or butter
What is the concept that is illustrated by the example of parents deciding how to allocate their income?
Resource allocation
What is the principle that states that people face trade-offs?
Principle 1
What is the relationship between inflation and unemployment, according to Principle 10?
They have a short-run trade-off
What is the opportunity cost of studying for one more hour?
Giving up one hour of TV
What is the concept that is illustrated by the example of society facing a trade-off between a clean environment and a high level of income?
Trade-off
What is the concept that is illustrated by the example of a student deciding how to allocate time between studying and watching TV?
Resource allocation
Understand the concept of opportunity cost and how it affects decision-making. Learn how to compare costs with benefits of alternatives and make informed choices. Based on N. Gregory Mankiw's Principles of Economics, 9th Edition.
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