Decision Making

People's incomes are limited because

•  they generally spend too much.

• individual human capital is limited.

• companies never pay people what they're worth.

• they don't want to work more than 40 hours a week.

The condition of scarcity exists because

• there aren't enough resources to produce everyone's wants.

•  the resources we need are in other parts of the world.

•  resources are too expensive.

• the government manages resources and doesn't provide for everyone's wants.

Opportunity cost is

• only experienced when you don't have enough money.

• everything that you give up when you make a choice.

• nonexistent because, eventually, we can have everything we want.

• the value of the next-best alternative when a decision is made.

What might be helpful criteria to include in a PACED decisionmaking model when choosing a college?

• Large number of friends attend, close proximity to home, close to a beach

• Great reputation as a party school, really big buildings, school colors look good on you

• High academic ranking, close proximity to home, high level of financial aid

•  Large number of friends attend, beautiful campus, don't need a car

The steps in the PACED decisionmaking model are

• define the problem, list alternatives, state criteria, evaluate alternatives, and make a decision.

• define the problem, act on the problem, choose possible solutions, and execute the decision.

• define the problem, list alternatives, choose possible solutions, evaluate alternatives, and make a decision.

•  prepare the model, align the model, choose possible solutions, evaluate alternatives, and make a decision.

The candy machine has three of your favorite candies. In order of preference, you like Orange Gummies, Cremepuffs, and Lillilollies. Each costs $1.00 and you have $1.00. What is your opportunity cost?

• Lillilollies

• Orange Gummies

• Cremepuffs

• Lillilollies and Cremepuffs

What does the term 'human capital' refer to in the context of labor markets?

• The physical resources available for production

• The education, talents, and skills possessed by individuals

• The financial capital required to start a business

• The total number of workers in an economy

How does scarcity affect wages in the labor market?

• Wages are determined solely by the number of workers available

• Higher demand for specialized skills can lead to higher wages

• Wages are fixed and do not change with demand

• Scarcity has no impact on wages

Why must individuals make choices among alternatives according to the concept of scarcity?

• Because there are unlimited resources available

• Because resources are limited and cannot satisfy all wants

• Because everyone has the same income

• Because choices do not affect the economy

What is the primary difference between decision making and informed decision making?

• Informed decision making is based on luck.

• Decision making involves careful analysis.

• Informed decision making involves weighing costs and benefits.

• Decision making always leads to a good outcome.