What is macroeconomics quizlet?
Macroeconomics. the study of the overall aspects and workings of an economy– inflation, growth, employment, interest rates, and the productivity of the economy as a whole.
What is an example of a positive incentive for someone to use stairs when an elevator is available quizlet?
Public buildings in the United States are required to be accessible to the disabled and, as a result, almost all have an elevator. What would be an example of a positive direct incentive for those who can use stairs? Using the stairs will give you some exercise and make you healthier.
Why would economists find it surprising if the CEO of a large company does his or her own housework?
Why would economists find it surprising if the CEO of a large company does his or her own housework? a. The opportunity cost of CEO's time is quite high because they have an abundance of time to spend on housework.
What do you understand by economic choice and opportunity cost?
Opportunity cost is the value of the best opportunity forgone in a particular choice. It is not simply the amount spent on that choice. The concepts of scarcity, choice, and opportunity cost are at the heart of economics. A good is scarce if the choice of one alternative requires that another be given up.
What is meant by microeconomics quizlet?
Microeconomics. The study of the behaviour (supply and demand) of individual markets. Scarcity. A situation in which unlimited wants exceed the limited resources available to fulfill those wants. Factors of production.
What is the basic difference between macroeconomics and microeconomics quizlet?
The basic difference between macroeconomics and microeconomics is: microeconomics concentrates on individual markets while macroeconomics focuses primarily on international trade.
Which of the following is the primary concept that economists use to explain how humans make decisions?
how to allocate resources to satisfy wants and needs. Which of the following is the primary concept that economists use to explain how humans make decisions? The opportunity cost of going to school rather than working is the cost of: potential wages.
What is an example of a direct negative incentive?
Examples of negative incentives Supervisors hope to motivate employees to work harder from the beginning of the year so they meet the goal before the deadline and can then receive the bonus.
Do economists believe that the best decisions are made at the margin?
Economists believe that the best decisions are made at the margin. The Production Possibilities Curve or Frontier illustrates both the economic concepts of scarcity and opportunity cost. Economist feel the best way to evaluate the cost of a decision is to consider EVERY possible alternative choice.
Why do economists use models?
Its basic purpose is to explain and analyze prices and quantities traded in a competitive market. The model's equations determine the level of supply and demand as a function of price and other variables (for example, income).
What is opportunity cost economics quizlet?
opportunity cost. the most desirable alternative given up as the result of a decision. thinking at the margin. the process of deciding whether to do or use one additional unit of some resource. cost/benefit analysis.
What is demand according to economics?
Demand is the quantity of consumers who are willing and able to buy products at various prices during a given period of time. Demand for any commodity implies the consumers' desire to acquire the good, the willingness and ability to pay for it.
What does microeconomics deal with?
Microeconomics studies the decisions of individuals and firms to allocate resources of production, exchange, and consumption. Microeconomics deals with prices and production in single markets and the interaction between different markets but leaves the study of economy-wide aggregates to macroeconomics.
What does macroeconomics deal with?
Macroeconomics focuses on the performance of economies – changes in economic output, inflation, interest and foreign exchange rates, and the balance of payments. Poverty reduction, social equity, and sustainable growth are only possible with sound monetary and fiscal policies.
What is the main difference between macroeconomics and microeconomics?
Microeconomics is the study of economics at an individual, group, or company level. Whereas, macroeconomics is the study of a national economy as a whole. Microeconomics focuses on issues that affect individuals and companies. Macroeconomics focuses on issues that affect nations and the world economy.
What is the difference between the study of microeconomics and macroeconomics?
Macroeconomics vs microeconomics: the key differences The main differences between them are: Macroeconomics seeks to find a general perspective, at a national level, while microeconomics focuses on the individual's perspective, at a consumer level.
What is the economic man theory?
The economic man theory is a fundamental principle of economics that states that individuals are rational and always act in their own best interests. In other words, people make financial decisions based on what they believe will result in the greatest benefit for themselves.
What do we mean when we say that economics is the study of choices made under conditions of scarcity?
Economics is the study of how humans make choices under conditions of scarcity. Scarcity exists when human wants for goods and services exceed the available supply. People make decisions in their own self-interest, weighing benefits and costs.
What is a negative incentive in economics?
Negative incentives. Negative economic incentives, or disincentives, punish people financially for taking certain actions. This is a way of encouraging specific actions without making them compulsory.
What is direct incentive economics?
Direct incentives are designed to influence returns to investment directly. The distinction between direct and indirect incentives is somewhat blurred. Direct incentives are designed to have an immediate impact on resource users and influence returns to investment directly.
What does it mean to think at the margin in economics?
Thinking at the margin means to let the past go and to think forward to the next hour, day, year, or dollar that you expend in time or money.
What does it mean to make decisions at the margin economics?
A choice at the margin is a decision to do a little more or a little less of something. Assessing choices at the margin can lead to extremely useful insights. Consider, for example, the problem of curtailing water consumption when the amount of water available falls short of the amount people now use.
Why do economists use models quizlet?
Economist use models because they clarify our thinking, show how variables influence other variables and they are fun.
What is economic theory used for?
For instance, some theories aim to describe particular economic phenomena, such as inflation or supply and demand, and why they occur. Other economic theories may provide a framework of thought that allows economists to analyze, interpret and predict the behavior of financial markets, industries and governments.
Why do we have opportunity cost?
Because of scarcity, every time we do one thing we necessarily have to forgo doing something else desirable. So there is an opportunity cost to everything we do, and that cost is expressed in terms of the most valuable alternative that is sacrificed….
What is opportunity cost in economics with example quizlet?
Terms in this set (6) Opportunity Cost is when in making a decision the value of the best alternative is lost. e.g. choosing electricity over gas, the opportunity cost is what you've lost from not picking gas. Firms take decision about what economic activity they want to be involved in.
What is demand Economist?
Demand is an economic principle referring to a consumer's desire to purchase goods and services and willingness to pay a price for a specific good or service. Holding all other factors constant, an increase in the price of a good or service will decrease the quantity demanded, and vice versa.
How do economists define the law of demand?
The law of demand is a fundamental principle of economics that states that at a higher price consumers will demand a lower quantity of a good. Demand is derived from the law of diminishing marginal utility, the fact that consumers use economic goods to satisfy their most urgent needs first.
What does microeconomics deal with quizlet?
What does microeconomics deal with? The impact of individual and business decisions on economic markets.
What is microeconomics theory?
Microeconomics concerns decision-making by individuals and small groups, such as families, clubs, firms, and governmental agencies. As the famous quote from Lord Robbins at the beginning of the chapter says, microeconomics is the study of how scarce resources are allocated among competing ends.