Principles of Economics Overview

<p>Each member's abilities, efforts, and desires. (A)</p> Signup and view all the answers

<p>Scarcity limits individuals from reaching their highest potential standard of living. (C)</p> Signup and view all the answers

<p>Enhanced overall well-being of society despite reduced incomes (D)</p> Signup and view all the answers

<p>Maximizing the benefits obtained from scarce resources (C)</p> Signup and view all the answers

<p>Income tax structure that scales with earnings (A)</p> Signup and view all the answers

<p>Reduction in overall production of goods and services (C)</p> Signup and view all the answers

<p>Between efficiency and equality in benefit distribution (C)</p> Signup and view all the answers

<p>They encourage drivers to increase their speed. (D)</p> Signup and view all the answers

<p>They reduce the benefits of careful driving. (D)</p> Signup and view all the answers

<p>Drivers are more attentive on icy roads. (C)</p> Signup and view all the answers

<p>More accidents due to faster driving. (B)</p> Signup and view all the answers

<p>Cost-benefit analysis of safety measures. (C)</p> Signup and view all the answers

<p>Peltzman found that while driver deaths decrease, pedestrian deaths increase due to more accidents. (A)</p> Signup and view all the answers

<p>Principle 5: Trade can make everyone better off. (A)</p> Signup and view all the answers

<p>They alter the behavior of drivers and pedestrians due to changing incentives. (A)</p> Signup and view all the answers

<p>It demonstrates that not all incentives lead to beneficial social outcomes. (A)</p> Signup and view all the answers

<p>Safer cars may lead drivers to take risks, resulting in more pedestrian accidents. (C)</p> Signup and view all the answers

The situation where there are limited resources to satisfy unlimited wants.

The study of how society manages its scarce resources.

The process of allocating resources among members of a society to produce and distribute goods and services.

The limited nature of society's resources means that we cannot produce all the goods and services we desire.

The economic problem arises because of the tension between scarcity and unlimited wants.

The idea that any gain comes with a sacrifice; getting more of one thing means getting less of another.

The most efficient use of resources means society gets the highest amount of value from them.

The distribution of economic benefits equally among all members of society.

Policies made to help those with the least resources, often through taxes or social programs.

The idea that when the government takes resources from the wealthy to help the poor, it may discourage hard work, potentially reducing the overall size of the economic pie.

The idea that policies can have unexpected and often negative effects when they fail to account for how people will change their behavior in response to those policies.

The process of weighing the costs and benefits of different actions to make the best decision.

The idea that when something becomes safer, people tend to take more risks.

The value of one more unit of something, like driving more slowly.

The cost of one more unit of something, like driving more slowly.

The idea that people respond to change in incentives by adjusting their behavior.

The idea that any decision involves giving up something else. It applies to individuals and societies. Every choice leads to a sacrifice.

The impact of a decision that is not directly intended but that arises as a result of changing incentives.

When individuals trade with each other, they can both benefit. This is because trade allows them to specialize in what they do best and then exchange goods and services with others.

The idea that trade can increase the overall well-being of everyone involved, even if it is not always fair to everyone. This is because trade allows for specialization and efficiency, leading to a greater overall output.