ECON 202 Chapter 1 Answers

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Sacrificing one good or service to purchase or produce another
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Trade off
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The concept that “there is no free lunch” reflects the notion that
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Nothing is “free”
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Marginal analysis involves the comparison or evaluation of
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The additional cost versus the additional benefit of a decision
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The need to make choices because economic wants exceed economic means describes
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The economizing problem
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All natural resources used in the production of goods and services
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Land
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Includes all manufactured aids used in producing consumer goods and services
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Capital
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The function of an entrepreneur is
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To create new products, to combine scarce resources, and to produce a good or service
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Specializing and participating in international trade allows an economy to
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Increase the quantities of capital goods available to society and circumvent the output limits imposed by it’s own production possibilities curve.
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These abilities are economic resources
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Entrepreneurial and human
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As the production of a particular good increases, the opportunity cost of producing an additional unit rises
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Law of increasing opportunities
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In a world of ____, the decision to obtain marginal benefit associated with some specific option always includes the marginal cost of forgoing something else.
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Scarcity
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Ceteris Parabus
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all other things equal
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The concept or term that refers to the notion to the notion that all variables excepts those under immediate consideration are held constant for a particular analysis in known as:
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The other-things-equal assumption Ceteris Parabus
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This form of economic considers the desirability of certain aspects of the economy and underlies expression of support for particular economic policies.
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Normative

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