Crash Course Economics Episode 1

How did economist Alfred Marsh define economics?

• a study of man in the ordinary business of life

• the freedom to purchase what a person chooses to purchase

• the study of how governments print and distribute money

• a study of the purchasing power of every American

What is opportunity cost?

• the value of the option not chosen in an economic decision

• how much a consumer must pay for an economic decision

• how much a person may be willing to pay for a commodity

• the nonfinancial cost of an economic purchase

What factor determines an economic decision?

• the benefit should outweigh the cost

• a purchase should be made only for needs not wants

• credit purchasing promotes financial freedom

• whether or not the item can be acquired

Why must people analyze their economic choices?

• People have limited resources.

• People have unlimited wants.

• Benefits always outweigh costs.

• Costs always outweigh benefits.

What does free market mean?

• unrestricted competition in the business world

• the government regulates money

• the customer is always right

• private industry controls cash flow

How do government officials use economic theory?

• to guide public policy

• to determine tax structure

• to regulate businesses

• to control foreign trade

What are incentives in terms of economics?

• a concession to stimulate productivity

• the intrinsic benefit of labor

• an employer's motive to hire

• development of the assembly line

Why is understanding incentives important?

• Without the proper incentive, a policy is not going to work

• Incentives always cause an increase in production

• Incentives can help the government regulate business

• Consumers require incentives to purchase

How does microeconomics differ from macroeconomics?

• Macro deals with the nation as a whole; whereas, micro deals with individual factors.

• Macro deals with foreign policy; whereas, micro deals with domestic policy.

• Macro deals with the private sector; whereas, micro deals with government regulation.

• Macro deals with communism and command economy; micro deals with capitalism.