Economics and Decision-Making Worksheet

What is the purpose of the PACED decision-making model?

• To choose which pet to adopt

• To make important decisions in a thoughtful way

What does PACED stand for?

• Problem, Ask Questions, Cost, Evaluate, Decision

• Problem, Alternatives, Criteria, Evaluate, Decision

Competition in a market economy:

• Creates monopolies.

• Regulates economic activity.

What does the "invisible hand" do in a market economy?

• Reduces competition among firms

• Guides resources to their most valued use

The scarcity problem exists because

• Resources are too expensive

• People have unlimited wants

In a market economy, who owns most of the resources and makes decisions about how they are used?

• Individuals

• Government

What market force is the “motivator” of economic activity?

• Government

• Self-interest

Self-interest benefits society by:

• Encouraging people to save money rather than spend it.

• Motivating people to work and produce goods and services.

Competition in a market economy:

• Creates monopolies.

• Regulates economic activity.

What does the "invisible hand" do in a market economy?

• Controls inflation rates

• Guides resources to their most valued use