Economists Use the Scientific Method and the Tools of Economics

question 130

Multiple Choice

Economists use the scientific method and the tools of economics to study

• A) only the decisions of individuals.
• B) only the decisions of business firms.
• C) only economic growth and gross domestic product (GDP).
• D) only the production possibilities curve.
• E) anything around them; the world is the economist's laboratory.

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Definitions:

Monetary Costs

Expenses measured in terms of the amount of money expended or required to purchase goods, services, or assets.

Alternative Activities

Options or activities that can be chosen as alternatives to the current activity being engaged in, often considered in the context of opportunity cost.

Comparative Advantage

The ability to make something at a lower opportunity cost than other producers face.

Absolute Advantage

The ability to make something using fewer resources than other producers use.