Chapter 1 – Flashcards with Answers

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question
The ___________ cost of an activity takes account not only of required money outlay but also the value of the time you spend on the activity.
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opportunity
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The opportunity cost of your time can be roughly estimated using your _______.
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wage
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POSITIVE or NEGATIVE economic analysis involves objective statements that can be disproven using data.
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POSITIVE
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POSITIVE or NEGATIVE economic analysis may include subjective and ethical judgments and makes recommendations on the best decision to achieve a given end.
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NEGATIVE
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study of how agents choose to allocate scarce resources and the impact of those choices on society.
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economics
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Microeconomics studies​ _________, while macroeconomics studies​ _________.
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a small piece of the overall​ economy; the economy as a whole
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The three principles of economics include​ ____________, ______________, and ______________
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optimization, equilibrium, and empiricism
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OPTIMIZATION, EQUILIBRIUM, or EMPIRICISM describes a situation where people weigh costs and benefits when making a decision
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OPTIMIZATION
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OPTIMIZATION, EQUILIBRIUM, or EMPIRICISM describes a situation where no one would benefit from changing his or her behavior
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EQUILIBRIUM
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OPTIMIZATION, EQUILIBRIUM, or EMPIRICISM describes a situation where economists use data to analyze what is happening in the world
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EMPIRICISM
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During the process of optimization economists believe that people are considering​ the ___________ of a​ choice, given the ______________ available at the time
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feasibility; information
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The goal of optimization for an individual is to maximize overall ____-_______
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well-being
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The opportunity cost of an activity is a measure of what is GIVEN UP or GAINED when you do that activity
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GIVEN UP
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For a market to be in​ equilibrium, three conditions must hold: The amount produced by sellers must be EQUAL or MORE to the amount purchased by buyers; The costs of making a product must be EQUAL or LESS than the final price at which the product sells; Buyers must place a value on the uses of the product that is LESS THAN or GREATER THAN the cost of buying the product.
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EQUAL; LESS THAN; GREATER THAN
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______________ describes how one event can bring about change in another.
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causation
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