The use of economic perspectives can be used to explain why we make decisions in our daily lives. This process can be called “economic theory,” and it includes a series of steps from broad generalizations known as “laws” to more detailed theories, or “hypotheses.” It is an important tool that social, physical, and life scientists use to study the effects of economic decisions.
rational self-interest vs greedy vs irrational self-interest
In economics, which of the following terms implies the least degree of faith in an economic generalization? The least degree of confidence is associated with economic generalizations involving a trade-off. A trade-off involves a value judgment about the benefits and costs of doing something, based on the evidence.
the economy is using its resources inefficiently
Economic generalizations have varying degrees of confidence, but there are some that are more confident than others. One of these is the notion that the economy can only produce a certain amount of each good. When this is true, the economy cannot fully utilize the resources of its society. As a result, people’s wants may be insatiable.
The production of a good requires the sacrifice of a scarce resource. If the economy produces more of one good, it must sacrifice a lower amount of another good. An economy will achieve full employment if it can produce all its resources equally.
If the marginal cost of producing a good is higher than the marginal benefit, the government should step in to provide it. The government should provide more goods to the people until the marginal benefit of production is higher than the marginal cost. As print sources are being replaced by electronic sources, the marginal benefit of reading a second newspaper is lower than the marginal cost of reading the first one.
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