Scope of Economics Overview

<p>A consumer must choose between buying a new car and taking a vacation due to limited funds. (D)</p> Signup and view all the answers

<p>Objectively analyzing the data to understand the relationship between education and earnings, without making value judgments. (C)</p> Signup and view all the answers

<p>A group of consumers boycotting a product due to ethical concerns. (B)</p> Signup and view all the answers

<p>What is the effect of increased government spending on overall economic growth and inflation? (B)</p> Signup and view all the answers

<p>Normative economics (D)</p> Signup and view all the answers

<p>A student chooses to buy a new textbook instead of going to the movies with friends. (C)</p> Signup and view all the answers

<p>Causation implies a direct cause-and-effect relationship, while correlation indicates a statistical association without proving cause. (D)</p> Signup and view all the answers

<p>Free-rider problem (C)</p> Signup and view all the answers

<p>To offer a simplified representation of reality used to make predictions. (C)</p> Signup and view all the answers

<p>Continue moving toward an option as long as the change makes them better off, and stop when it makes them worse off. (A)</p> Signup and view all the answers

<p>A question that is relevant and addresses issues contributing to social welfare and can be answered using data. (A)</p> Signup and view all the answers

<p>People who are happier tend to exercise more frequently (it could be that people exercise more because they are happy, not the other way around). (B)</p> Signup and view all the answers

<p>Trade-offs arise due to limited resources, forcing individuals to choose between alternatives. (D)</p> Signup and view all the answers

<p>In controlled experiments, the researcher assigns subjects to treatment and control groups, while in natural experiments, subjects end up in those groups due to naturally occurring events. (B)</p> Signup and view all the answers

<p>The point where the line crosses the y-axis. (D)</p> Signup and view all the answers

<p>To allow for direct comparison and calculation of net benefits. (A)</p> Signup and view all the answers

<p>Because there might be omitted variables or reverse causality. (C)</p> Signup and view all the answers

<p>It may lead to suboptimal choices because not all costs and benefits are known. (C)</p> Signup and view all the answers

<p>A long line at a grocery store checkout. (D)</p> Signup and view all the answers

<p>When using it for a daily commute in the city. (C)</p> Signup and view all the answers

The study of how agents make choices with scarce resources.

Individuals or groups making economic choices, like consumers or firms.

Goods that are not enough to satisfy all wants.

Describes what economic agents actually do based on facts.

Determines what economic agents should do based on value judgments.

Study of individual choices and their effects on prices and resources.

Study of the economy as a whole, including aggregate indicators.

Making the best possible choice with available information.

When making a decision, giving up something to gain something else.

Limited resources that restrict choices and require trade-offs.

The value of the best alternative forgone when making a choice.

Comparing benefits and costs to determine the optimal choice.

A situation where no one benefits from changing their behavior.

When someone benefits without contributing to the cost.

Using data to answer questions and validate theories.

When one event directly influences another.

A relationship where two variables change together, but one does not cause the other.

Factors not accounted for that affect correlations.

Examining the change in benefits and costs from one option to another.

A systematic approach to testing theories and hypotheses with data.

Questions that are socially relevant and can be answered with empirical data.

Visual tools to summarize data and represent models.