Economics is the study of

how society uses limited resources

The knowledge and skills acquired by a worker through education and experiences is a description of which factor of production

human capital

Which of the following is an example of a normative question

should Florida implement a state income tax to reduce its deficit?

Economic models are used to

explore decision making by individuals, firms and other organizations and their outcomes

The opportunity cost of something is

what you sacrifice because of the choice you make

The trade offs made by the US government to fund the war in Iraq

represent what was potentially sacrificed to engage in the war

People acting in their own self interest is the basis of the

principle of voluntary exchange

according to the principle of diminishing returns, if the number of workers increased beyond the point of diminishing returns, then the additional worker

increases total output by less than the amount of previous workers

If nominal salaries increase but real salaries fall, this means that

the purchasing power of money has decreased

a change in the quantity demanded of a product is the result of a change in

the price of the product

the quantity demanded of a product increases as

the price of the product falls

In constructing demand curves, the ceteris paribus principle directs the economist to assume that

quantity changes don't affect prices

the market demand curve

show the relationship between the price of a good and the quantity that all consumers together are willing to buy

the law of demand can be explained as

the higher the price, the smaller the quantity demanded, ceteris paribus

after the government decreased cigarette taxes in several Canadian provinces, demand for cigarettes ___________ in the provinces; shifting the demand curve to the ___________

Increased;right

a change in demand for cigarettes resulting from a decrease in taxes would normally create, ceteris paribus

an increase in the quantity supplied