The word economy comes from the Greek word oikonomos which means one who
manages a household.
The management of societys resources is important because resources are scare. Scarcity
means that society has limited resources and therefore cannot p
13. Institutions that support economic growth are the ones that:
give the government more control over what is produced and how it is produced.
encourage consumption and discourage savings.
provide incentives for entrepreneurs to take risks and innovate.
16. Which of the following statements is TRUE?
Specialization and trade raise wages in both countries that are party to the trade.
Trade causes workers in low-wage countries to receive an even lower wage.
Trade makes workers in high productivity countries
5. In the 2 hours between classes a student can do one of three things, ranking them from
most to least desirable as: (1) chat with friends, (2) study economics, or (3) eat lunch. This
student's opportunity cost of chatting with friends is:
the value of s
1. David sells his car, which he considers worthless, to Cameron for $200. Which of the
following statements is true?
This trade did not create value because Cameron is buying a car that David considers
Cameron is the only one made better off b
9. One benefit of trade is that it:
allows for increased specialization and mass-production techniques that lower per
unit costs of production.
increases the division of knowledge because trade makes people more self-sufficient,
producing more of what the
1. The main incentive for business activity is:
Score: 1 of 1
2. Adam Smith coined the term invisible hand to mean:
a physical hand that leads individuals to promote social interest by p
17. A policymaker wants to reduce inflation. In order to make an intelligent decision about
how to do so, the policymaker:
needs to know the causes of inflation, for example, the government's printing of too
should use a simple rule: once infl