Economics

What is the fundamental problem of economics as a discipline?

● The allocation of resources among competing wants because there are unlimited
wants limited resources

What characterizes a laissez faire approach to economics?

● Government hands-off
● Markets relied-upon to perform allocations

What characterizes a command economy

● Government makes the decisions
● Decisions enforced with force of law (and sometimes martial force)

With what kinds of topics does macroeconomics concern itself?

● Aggregate economic phenomena like the rate of unemployment and inflation.

Which of the following is an example of a normative question?

● e. Is the goal of sustainability of greater importance than the goal of economic
growth as we move into the 21st century?

Which of the following best describes the precautionary principle?

● b. We should err on the side of caution when dealing with natural systems or
human health.

How is labor productivity defined?

● b. The level of output produced per worker (or worker-hour).

What is the law of demand?

 ● As price increases consumers will purchase less of the specific commodity.
● As price decreases consumers will purchase more of the specific commodity.

What problems are we most likely to see at which stage of the business cycle?
● High unemployment during recessions