Economics

What is a cost-benefit analysis?

• A technique to increase benefits in market exchanges

• A strategy to minimize costs in government spending

• A process of determining potential costs and benefits of an action

• A method to determine the most profitable business

What does scarcity lead to?

• Specialization, trade, and interdependence

• Decrease in market exchanges

• Reduction in economic decisions

• Increase in barter systems

What fostered the growth of markets?

• The decline of cities and empires

• The variability in the distribution of productive resources

• The growth of cities and empires

• The decrease in specialization

What encouraged specialization?

• The analysis of costs and benefits

• The growth of governments

• Market exchanges

• The transition from monetary economies to barter

What is a result of the growth of markets?

• A decrease in economic decisions

• A shift from barter to monetary economies

• A decline in trade and interdependence

• An increase in the distribution of productive resources

How does trade affect economic growth?

• By decreasing consumer choices

• By increasing specialization and efficiency

• By limiting market exchanges

• By reducing interdependence among countries

What role does government play in a market economy?

• Eliminating public goods

• Controlling all economic decisions

• Providing legal frameworks and protecting property rights

• Directly setting all prices in the economy

Why is the concept of opportunity cost important in economics?

• It highlights the benefits of making a decision

• It represents the cost of choosing one option over another

• It eliminates the need for cost-benefit analysis

• It ensures that resources are always used efficiently