4/2/2023 0 Comments Invisible hand economics![]() Size of the pie equality the property of distributing economic prosperity uniformly among the members of societyĭividing the pie up due to trade off what do we have to do to make decisions requires the person to compare the costs and benefits of alternative courses of action opportunity cost whatever must be given up to obtain some item "One who manages the household" (Allocate its scarce resources) What are the two things society needs to allocate because they can't produce everything 1) people to jobsĢ) goods and services they want to produce scarcity the limited nature of society's resources economics the study of how society manages its scarce resources what do economists study how people make decisions and how they interact with others ten principles of economics 1) People face trade-offĢ) The cost of something is what you give up to get itĦ) Markets are usually a good way to organize economic activityħ) Governments can sometimes improve market outcomesĨ) A country's standard of living depends on its ability to produce goods and servicesĩ) Prices rise when the government prints too much moneyġ0) Society faces a short-run trade-off between inflation and unemployment what do the first principles discuss How individuals make decisions how do 5,6,7 relate to each other people interact with each other what do we usually have to do if we want to get something we like we usually have to give something else that we also like (trade-off) efficiency the property of society getting the most it can from its scarce resources economy A group of people dealing with one another as they go about life In the 1990s, inflation in the United States was about 3 percent per year.ĭuring the 1990s, inflation in the US was quite mild averaging about 3 percent per year. There is strong, positive relationship between a country's productivity and the standard of living experienced by its people. The increase in living standards of Americans over the past century is mainly due to improvements in productivity. ![]() In other words, money for rent and food is not what you have to give up to go to college, since you must pay for rent and food even if you do not attend college. Therefore, rent is not part of the opportunity cost of attending college. ![]() False, You would incur expenses such as room and board whether you attend college or not. (T/F) Normal cost of living expenses, such as room and board, are included in the opportunity cost of attending college. Increasing the money supply will stimulate the demand for "goods and services", encourage firms to hire workers to meet the increased demand, and, will put an upward pressure on the price level. In the short run, if the money supply increases, which of the following is NOT likely to happen? lead to a lower rate of inflation. When production of a good pollutes the air and creates health problems bystanders, the market, left on its own, may fail to take this cost into account and too much pollution would be produced. Pollution is a classic example of an externality. This is an example a: a market failure caused by an externality. Thousands of people develop asthma and breathing problems from exposure to air pollution. When one goes down, the other increases (and vice versa). There is a short run trade-off between inflation and unemployment. ![]() In the short run, an increase in the money supply will likely cause a decrease in the unemployment rate and an increase in inflation. Citizens of high-income countries generally have better nutrition, health care and live longer than those in low-income countries. what conclusions can be drawn from this statement? There is strong, positive relationship between a country's productivity and the standard of living experienced by its people. US citizens have better nutrition, better healthcare, and a longer life expectancy than citizens of Nigeria. ![]()
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