1) Explain these three key economic ideas: People are rational, peoplerespond to incentives, and optimal decisions are made at the margin.2) Discuss how a society answers these three economic questions: Whatgoods and services will be produced? How will the goods and servicesbe produced? Who will receive the goods and services produced?

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Answered: 1) Explain these three key economic…

Exploring Economics

8th Edition

ISBN:9781544336329

Author:Robert L. Sexton

Publisher:Robert L. Sexton

Chapter3: Scarcity, Trade-offs, And Production Possibilities

Section: Chapter Questions

Problem 1P

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1. Describe economics as the study of "choice" and "scarcity".
1. What goods and services should be produced to meet consumers' needs? In what quan- tity? When should they be produced? 2. How should goods and services be produced? Who should produce them, and what re- sources, including technology, should be combined to produce them? 3. Who should receive the goods and services produced? How should they be allocated among consumers?
Economics is a social science which deals with human behavior as a relationship between ________. a. unlimited buyers and limited sellers b. consumption and production c. unlimited wants and scarce resources d. unending wants and limited people
1: What is Economics, and Why Is It Important? 2: What is Studied in Microeconomics and Macroeconomics? 3: What are some of the Requirements for Economic Models?
1. In a command system a) self-interest motivates and commands each business firm's decisions and actions. b) the head of each family decides and commands what to do with the family's resources. c) a government-appointed planning board makes production and allocation decisions. d) market traders command what outputs are produced and how they are allocated.
Which of the following is not included in the decisions that every society must make?a. What goods will be produced?b. Who will produce goods?c. What determines consumer preferencesd. Who will consume the goods?
"What is Economics?" Please respond to the following: 1. Identify a recent purchase that you made, recently, and determine how scarcity influenced your purchase decision. 2. Give an example of how scarcity of a product would have an impact on a microeconomic level. Please explain your rationale.
Which of the following best demonstrates the influence of economic factors on consumer decision-making? a. A consumer buys a Lexus after her neighbors and garden club pals each buy one. b. A married couple with three young children purchase a minivan. c. A blue collar worker holds off on buying a new truck, pending potential layoffs at work. d. A young professional buys a utility vehicle for off-road exploring.
1.1 Economics concerns itself with: 1. A systematic understanding of patterns of production, consumption and distribution of goods and services. ii. A study of money, banking, capital formation and wealth. il. A study of how limited resources are used to satisfy unlimited human wants. iv. The study of the application of scarce means to a multitude of human wants. Which of the above statements can be associated with the broad subject matter studied in economics? a) None of them. b) All of them. c) Only statements i, ii and i. d) Only statements i, i and iv. 1.2 The basic economic problems faced by a socialist economy are: a) Different from those faced by a mixed economy. b) Different from those faced by a market economy, but the same as those faced by a mixed economy. c) Similar to those faced by both a market and a mixed economy. d) Different from those faced by a market economy. prices will usually be greater than GDP at prices because of 1.3 GDP at a) constant; current; inflation b)…
Which of the following questions is not answered by the decisions that every society must make? a. What determines consumer preferences? b. What goods will be produced? c. Who will produce the goods? d. Who will consume the goods?
This study seeks to understand and explain the behavior of individuals, as such, consumers, producers, labor, investors, business firms, etc. as they respond to changes in their economic environment. Select one: a. Positive economics b. microeconomics c. macroeconomics d. normative economics
Which of the following best illustrates the importance of addressing the three questions of economics?a. People's desires and needs are always changing.b. Businesses need to use limited resources wisely.c. Traditional methods of production are outdated.d. Businesses need to limit production.

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