The Economic Way of Thinking Stresses That

question 38

Multiple Choice

The economic way of thinking stresses that

• A) changes in personal costs and benefits generally fail to exert much impact on behavior.
• B) incentives matter--individuals respond in predictable ways to changes in personal costs and benefits.
• C) if one individual gains from an economic activity, then someone else must lose and in the same proportion.
• D) if a good is provided by the government, its production will not consume valuable scarce resources.

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Definitions:

Private Companies

Businesses whose ownership is private, meaning their shares are not traded on public stock exchanges, and often their financial information is not disclosed to the public.

Amortization Expense

The gradual reduction of a debt over time or the allocation of the cost of an intangible asset over its useful life.

Fair Value

The revenue generated from liquidating an asset or cost of moving a liability in a coordinated market operation on the day of measurement.

Undervalued Patent

A patent whose market value is below its potential economic value due to unrecognized or underappreciated benefits or applications.