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Macro Exam 2
Terms in this set (10)
Unlimited wants exceed the limited resources available
Scarcity is central to the study of economics because it implies that
every choice involves an opportunity cost.
Economics assumes that consumers and firms are ________ , not that they always make the right decisions.
A healthier workforce
-Translates into lower costs, in part by reducing illness-related absenteeism and premature retirements
-Performs more efficiently, thereby improving overall productivity in the workplace.
Firms that provide workers with health insurance may pay a lower wage to obese workers than to workers who are not obese because
the latter tend to be more productive at work and less costly to employ due to lower insurance claims and lower rates of absenteeism and early retirement.
Economists assume that people are rational in the sense that
they use all available information as they take actions intended to achieve their goals.
Why might studying economics be particularly good preparation for being the top manager of a corporation or a leader in government?
Economics teaches us how to look at the tradeoffs involved in every decision.
Which of the following statements about the idea that people are rational is correct?
The idea assumes that consumers and firms use all available information as they act to achieve their goals.
What do economists mean by the word "marginal"?
extra or additional
Economists believe that an activity should be continued up to the point where
the marginal benefit from the activity is equal to the marginal cost.
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