Podcast
Questions and Answers
What principle states that people make choices based on comparing expected costs and benefits?
What principle states that people make choices based on comparing expected costs and benefits?
- No-Free-Lunch Principle
- Thinking at the Margin
- Scarcity Forces Tradeoffs
- Costs Versus Benefits Principle (correct)
Which principle involves making decisions based on a small incremental change in an existing plan or activity?
Which principle involves making decisions based on a small incremental change in an existing plan or activity?
- Incentives Matter
- Thinking at the Margin (correct)
- Marginal Benefits
- Trade Makes People Better Off
What does the No-Free-Lunch Principle observe about every choice?
What does the No-Free-Lunch Principle observe about every choice?
- It promotes the well-being of society
- It includes invisible hand metaphor
- It leads to prioritization of needs and wants
- It involves tradeoffs (correct)
What is the additional gain or satisfaction obtained by consuming or producing one more unit of a good or service called?
What is the additional gain or satisfaction obtained by consuming or producing one more unit of a good or service called?
Which principle states that people respond to rewards and penalties in predictable ways, influencing their behavior and decision-making?
Which principle states that people respond to rewards and penalties in predictable ways, influencing their behavior and decision-making?
What does trade with others lead to, according to the principle mentioned in the text?
What does trade with others lead to, according to the principle mentioned in the text?
Which metaphor is used by Adam Smith to explain how self-interested individuals promote the well-being of society through market transactions?
Which metaphor is used by Adam Smith to explain how self-interested individuals promote the well-being of society through market transactions?
What do limited resources force individuals to do?
What do limited resources force individuals to do?
What is the observation that every choice involves tradeoffs referred to as?
What is the observation that every choice involves tradeoffs referred to as?
What does making decisions involving a small incremental change in an existing plan or activity consider?
What does making decisions involving a small incremental change in an existing plan or activity consider?
