What is Economics: Chapter Study

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Questions and Answers

What is the social science that studies the choices made by individuals, businesses, governments, and entire societies as they cope with scarcity and incentives?

  • Economics (correct)
  • Sociology
  • Anthropology
  • Psychology

Why do all economic questions arise?

  • Because we want more than we can get (correct)
  • Because of overproduction
  • Due to abundance of resources
  • Due to lack of incentives

What is the inability to satisfy all our wants called?

  • Sufficiency
  • Abundance
  • Scarcity (correct)
  • Overproduction

What is an incentive in economics?

<p>A reward that encourages an action (B)</p> Signup and view all the answers

What are the two main parts into which economics is divided?

<p>Microeconomics and macroeconomics (D)</p> Signup and view all the answers

What is the main focus of microeconomics?

<p>The study of choices made by individuals and businesses (B)</p> Signup and view all the answers

Which factor of production refers to the tools, machines, and buildings used in production?

<p>Capital (C)</p> Signup and view all the answers

Why do choices made in the pursuit of self-interest also promote the social interest?

<p>Because people's choices interact in markets (C)</p> Signup and view all the answers

Who earns interest as part of the distribution of goods and services?

<p>Capital (A)</p> Signup and view all the answers

What distinguishes positive statements from normative statements in economics?

<p>Positive statements are based on facts while normative statements are not (D)</p> Signup and view all the answers

Flashcards

Economics

The social science studying choices made by individuals, businesses, and societies due to scarcity and incentives.

Scarcity

The inability to satisfy all wants.

Incentive

A reward that motivates an action.

Microeconomics

Study of choices of individuals and businesses.

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Macroeconomics

Study of choices by entire societies/governments.

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Capital (factor of production)

Tools, machines, buildings used in production.

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Positive statement

An economic statement based on facts/evidence, not opinion.

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Normative statement

An economic statement based on opinions (often ethical/moral value judgements).

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Why economic questions exist?

There are more wants than resources.

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Self-interest

Motivation for an individual's choices.

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