1)Economics does not study correct or incorrect behaviors, but rather it assumes that economic agents make the best decisions given their knowledge of the costs and benefits. What term best describes this behavior?

A.

emotionally

B.

equitably

C.

rationally

D.

selfishly

2)What is the term in economics by which a group of buyers and sellers of a product come together to trade?

A.

market

B.

collective

C.

cooperative

D.

trade-off

3)Why do consumers have to make tradeoffs in deciding what to consume?

A.

they are limited by a budget constraint.

B.

not all goods give them the same amount of satisfaction.

C.

the prices of goods vary.

D.

there are not enough of all goods produced.

4)What might you call an outward shift of a nation's production possibilities...