The Basic Tools of Supply and Demand Are

question 116

Multiple Choice

The basic tools of supply and demand are

• A)useful only in the analysis of economic behavior in individual markets.
• B)useful in analyzing the overall economy, but not in analyzing individual markets.
• C)central to microeconomic analysis, but seldom used in macroeconomic analysis.
• D)central to macroeconomic analysis as well as to microeconomic analysis.

Understand the historical context and evolution of economic thoughts from classical economics to modern theories.

Recognize the contribution of significant economists to economic theory and policy.

Analyze the effectiveness of various economic policies in different economic conditions.

Appreciate the relevance of global economic integration and international capital flows on national economic policies.

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Definitions:

Production Possibility

The combination of goods and services that can be produced given available resources and technology, illustrating the trade-offs in production.

Linear

Describes a relationship or function that represents a straight line when graphed, indicating a constant rate of change.

Positive Economics

The branch of economics that concerns the description and explanation of economic phenomena, focusing on facts and cause-and-effect relationships without making judgments.

Normative Economics

The branch of economic analysis that makes prescriptions about the way the economy should work.