Explain why economics is considered a "social science".
Scientific methodology to build knowledge (scientific) + deals with human behavior (social)
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15
Distinguish between Obama and Richard Burr’s views on the role of the government in managing the economy.
Obama = government spending to decrease unemployment, rejected the view that the government has no role; Burr says government spending money does not work!
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15
Provide an example of a normative and a positive statement in Economics.
Positive: raising income taxes decreases consumption, normative: the government should raise income taxes to increase its budget.
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15
Outline the key differences between the Keynesian vs. Monetarist views on macroeconomics.
Keynesian = need government spending to stabilize economy and spend out of recession; Monetarist = spending won't work and simply leads to inflation
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lifesaver
Give 5 points!
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star
Double points!
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rocket
Go to first place!
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banana
Go to last place!
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15
Briefly summarize Jean-Baptiste Say's views on economics.
supported the laissez faire approach and believed that ‘supply creates its own demand’
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10
Using a concrete example, explain why consumers might not always act rationally.
Consumers' satisfaction affected by psychological biases (e.g. prices of wines)
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10
Using an example, explain the opportunity cost that a private company might face when it comes to its daily operations.
The opportunity cost of funding a new product may be to expand into a new geographical location, assuming it's the best choice forgone.
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20
Using a PPC, illustrate a scenario in which there is a constant opportunity cost between two goods (use actual goods)
E.g. farming goods, same colored pens
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20
What is Pareto efficiency? How is it illustrated on the PPC?
A firm / economy that is operating on the curve is Pareto efficient - one cannot be better off without making another worse off.
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20
Using a PPC, draw out a scenario of "actual growth"
Must be fully labeled; PPC does NOT shift outward.
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heart
Other team wins 10 points!
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shark
Other team loses 5 points!
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shark
Other team loses 25 points!
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thief
Give points!
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25
20
What are the three basic economic questions? Briefly elaborate.
What to produce, how to produce, for whom to produce.
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15
Why are there opportunity costs?
They arise due to the need to make choices as there are scarce resources.
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15
Explain the argument that the private sector is more efficient than the public sector in providing goods and services in an economy.
profit oriented = maximize profits & minimize costs + competition adds to more efficient allocation of resources