20 Questions
What is the study of how people allocate scarce resources for production, distribution, and consumption both individually and collectively?
Economics
Which principle of economics states that all resources are limited?
Scarcity Forces and Tradeoffs
What is the careful management of available resources in terms of the production and consumption of goods and services?
The Economy
Which term refers to what you spend when you make a choice (time, resources, money)?
Costs
Which principle of economics emphasizes that trade makes people better off?
Trade Makes People Better Off
What concept captures the scarcity and opportunity cost of choices when faced with the possibility of producing two goods or services?
Opportunity cost
In which type of economy does the government have little or no interference?
Laissez Faire Economy
According to Adam Smith, what motivates people in a free market economy?
Self-interest
What is the main advantage of a free market economy?
More choices
How does trade contribute to economic efficiency?
By allowing specialization and exchange
What is the main focus of microeconomics?
How individuals, businesses, and households make decisions
Which principle of economics emphasizes the concept that people have to give up something in order to get something else?
Scarcity Forces and Tradeoffs
What do economists mean when they talk about 'Thinking at the Margin'?
Assessing what you gain by adding one unit of something
What is the main difference between microeconomics and macroeconomics?
Microeconomics focuses on individual decision-making, while macroeconomics looks at the entire economy
What concept captures the idea that every choice requires tradeoffs?
Scarcity Forces and Tradeoffs
What is the opportunity cost of switching from making one set of things to making another set of things efficiently?
How much of one thing you have to give up to get more of the other thing
Which term describes the specialization of the labor force in which large jobs are broken down into many specialized jobs?
Labor division
What does the PPF model capture?
Scarcity and the opportunity cost of choices when producing goods or services
In terms of economics, what does the term 'allocative efficiency' refer to?
Devoting resources toward their best or optimal ends
What is the main reason why trade can be helpful according to the text?
It leads to more choices for consumers
Prepare for your economics test with this review, covering key terms and concepts such as the study of resource allocation, microeconomics, and macroeconomics. Understand the principles of how individuals and societies make choices to satisfy unlimited wants with limited resources.
Make Your Own Quizzes and Flashcards
Convert your notes into interactive study material.
