Econ Quiz 1 Definitions – Flashcards
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The rationality assumption implies that
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individuals will not intentionally make decisions that leave them worse off.
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Based on the recommendation of a friend, you buy a ticket and attend a movies with high expectations. After seeing the movie you think that it is the worst film ever made and that it was a complete waste of money. This situation
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is consistent with rational behavior because you thought you were going to like the movie.
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The three fundamental economic questions that a nation addresses in order to allocate societies scarce resources include all of the following except:
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Why will the items be produced?
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The economic way of thinking will
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allow you to make better decisions.
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The ceteris paribus assumption means
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other things equal.
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The ultimate purpose of economics is
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to study how individuals make choices.
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Economics is
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the study of how limited resources are allocated to satisfy unlimited wants.
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A rational self-interested student decides whether to purchase a textbook required for a particular class based on all of the following except
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whether the textbook has an attractive dust jacket.
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Rational, self-interested government officials seeking more funding for mass transit through higher taxes should consider
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the fact that raising taxes is generally unpopular and may result in a potential loss in a future election.
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A municipality taxing hotel guests to obtain funding for new sports stadium should consider all of the following except
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the winning potential of the sports team using the stadium.
