Economics Unit 1 Review

What is the difference between microeconomics and macroeconomics?

• Microeconomics is the study of individuals, Macroeconomics is the study of the economy as a whole

• Microeconomics is the study of the economy as a whole, Macroeconomics is the study of families

• Microeconomics is bigger than Macroeconomics

What is economics?

• The study of how people spend their vacation

• The study of how people run businesses

• The study of how people choose to use scarce resources to satisfy unlimited wants

Why is economics a social science?

• Because Karl Marx decided it was

• Because it is the study of human behavior regarding how we make choices

• Because it is the study of businesses.

What is the basic problem of economics?

• Scarcity

• People

• Resources

Why does scarcity exist?

• Limited money

• Limited resources

• Limited countries

Define goods.

• When someone has a job

• anything that can be eaten

• physical objects that can be produced, bought and sold

Define services.

• The work someone does for another person for pay

• Cans of food at a grocery store

• The study of people

What is an opportunity cost?

• Something you get when making a decision

• Most desirable alternative given up when you make a choice

• An award

What is an incentive?

• methods used to pay people

• methods used to make someone quit

• methods used to encourage people to take certain action

What is the cost-benefit analysis?

• Weighs the benefits of an action against its costs

• Weighs the two sides of an argument

• Is mandatory at jobs