Chapter 1

Question 1

ceteris paribus

Answer 1

all other things being equal or the same

Question 2

direct relationship

Answer 2

relationship between two variables moving in the same direction

Question 3

inverse relationship

Answer 3

relationship between variables moving in opposite directions

Question 4

linear relationship

Answer 4

relationship between two variables that is a straight line

Question 5

negative relationship

Answer 5

relationship between variables moving in opposite directions

Question 6

positive relationship

Answer 6

relationship between two variables moving in the same direction

Question 7

scatter diagram

Answer 7

plots of one variable against another for many values

Question 8

slope

Answer 8

change in y-axis divided by change in x-axis

Question 9

economics

Answer 9

study of choices while coping with scarcity and incentives

Question 10

normative

Answer 10

judgmental

Question 11

positive

Answer 11

factual

Question 12

scarcity

Answer 12

available resources are insufficient to satisfy wants

Question 13

incentives

Answer 13

rewards or penalties that encourage or discourage action

Question 14

opportunity cost

Answer 14

value of the best alternative

Question 15

marginal benefit

Answer 15

benefit of one additional unit of a good or activity

Question 16

marginal cost

Answer 16

cost of one additional unit of a good or activity