finance and econ test

What did Adam Smith write?

“The Wealth of Nations” 1776

who was the father of modern economics?

Adam smith

competition is….

the key to a healthy economy

what is economic enigma?

puzzles and riddles that might be explained through economic analysis

what is a resource?

anything used to produce a good or a service. ex: —> scarce; finite amounts

peoples wants are what…..?

UNLIMITED

what is MICROeconomics?

decision making by individuals, households, businesses

what is MACROeconomics?

working of an economy as a whole

what is scarcity forces tradeoffs

limited resources force people to make choices and face tradeoffs as a result of these choices.

cost versus benefits

people choose something when the benefits of doing so are greater than the costs.

thinking at the margin

most of the decisions we make each day involve choices about a little more, or a little less of something rather than making a whole sale change.

incentives matter

people respond to incentives in generally predictable ways.

trade makes people better off

by focusing on what we do well, and then trading with others, we will end up with more and better choices than by trying to do everything ourselves.

markets coordinate trade

markets usually do better than anyone or anything else at coordinating exchanges between buyers & sellers.

future consequences count

decisions made today have consequences not only for today, but also in the future.