The Economic Way of Thinking Quiz

Test your understanding of the key ideas that define the economic way of thinking and how economists go about their work as social scientists and policy advisers. This quiz covers topics such as rational choices, trade-offs, and the principles of economics.

Created by

@DelightfulAcer

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Questions and Answers

According to the economic way of thinking, what is a choice?

A rational decision based on comparing benefits and costs

What do economists consider when making choices?

The tradeoff between benefits and costs

What type of choices do most people make, according to the economic way of thinking?

How-much choices made at the margin

What does the economic way of thinking suggest about markets?

Markets are usually a good way to organize economic activity Signup and view all the answers

How do choices typically respond, according to the economic way of thinking?

Choices respond to incentives Signup and view all the answers

According to the economic way of thinking, what determines a country's standard of living?

The country's ability to produce goods and services Signup and view all the answers

What is the opportunity cost of going to a live concert?

The highest-valued alternative that must be given up to attend the concert Signup and view all the answers

What does a rational choice compare?

Costs and benefits Signup and view all the answers

Which principle of Economics involves evaluating incremental changes in the use of time?

Marginal benefit Signup and view all the answers

What does the opportunity cost of something consist of?

The things you can't afford to buy if you purchase the item Signup and view all the answers

In Economics, what determines the benefit of something?

Preferences Signup and view all the answers

What is a rational choice based on?

Comparing costs and benefits Signup and view all the answers

How is a rational choice related to preferences?

It takes into account preferences Signup and view all the answers

What does marginal benefit evaluate?

Incremental changes in activity Signup and view all the answers

"Choices Respond to Incentives" implies that:

"Changes in marginal cost or benefit can lead to changes in behavior" Signup and view all the answers

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