Adam Smith
Adam Smith is known as the _______________ of Modern Economics.
Father
This is a puzzle or riddle that might be explained by economic analysis...
What is "economic enigma?"
Desires are unlimited but resources are....
Limited
Most choices are not all or nothing. They involve a little more or a little less. We call this "thinking at the _____________."
What principle tells us that we should focus on what we do well and we will end up with more and better choices?
What is the "trade makes people better off" principle?
Adam Smith wrote what famous book of economic philosophy?
Wealth of Nations
This is "anything used to produce an economic good or service"...
ie., workers, tools, land
What is a "resource?"
Because resources are not unlimited, we say they are...
Scarce
What is the term for "something that motivates someone to take a particular course of action?"
The 6th economic principle states that markets are best at doing what?
What is "coordinating trade?"
Adam Smith is famous for what example of a factory to illustrate capitalism?
a pin factory
This type of economic analysis describes "how things are" and includes provable/disprovable facts....
What is "positive economics?"
What is the term for giving up one thing to gain another?
trade-off
"Good grades, praise, perks, titles, $$, excitement" are all examples of....
What are "positive incentives?"
Adam Smith use this term (metaphor) to describe the push that guides human behavior in the market place?
What is the "invisible hand?"
What year did Adam Smith write Wealth of Nations? And what did it coincide with?
1776; the Declaration of Independence; Age of Enlightenment
This type of economic analysis focuses on "how things should be done"...
What is "normative economics?"
What does TANSTAAFL stand for?
"There ain't no such thing as a free lunch."
Always a trade-off or cost!
What are several examples of "negative incentives?"
The "bad" economist looks only at direct consequences of an action or inaction.
The "good" economist looks at what?
What is "future" consequences or "indirect" consequences?
The following headline: "Average New Car Loan Rate Stands at 7.5% for Borrowers with Good Credit" is an example of a) normative economic analysis
b) an economic enigma
c) positive economic headline
d) negative economic analysis
What is "positive economic analysis"?
Provable or disprovable!
What type of analysis are you making when you calculate which side/which decision outweights the other?
Cost-benefit Analysis
What do economists claim regarding problems and incentives?
They claim that any problem could be solved if they had the freedom to implement whatever incentive they wanted. (although society may not be willing to implement that incentive...too much $, too cruel)
What is the latin term used in economics to mean "focusing on only ONE aspect of an economic problem and holding all other variables constant (the same)?
What is "ceteris paribus?"