Principles of Economics (MindTap Course List)
Principles of Economics (MindTap Course List)
8th Edition
ISBN: 9781305585126
Author: N. Gregory Mankiw
Publisher: Cengage Learning
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Chapter 1, Problem 1CQQ
To determine

Definition of economics.

Expert Solution & Answer
Check Mark

Answer to Problem 1CQQ

Option ‘a’ is correct.

Explanation of Solution

Option (a):

The economics can be defined as the study of how society manages its scarce resources. The economy consists of scarce resources and unlimited wants. So the economy is study about how the society manages theses scarce resources to meet this limitless wants. Thus, option ‘a’ is correct.

Option (b):

The business and profitability are two small parts in the economy but economy is not only the study about the how to run the business most profitability. Thus, the option ‘b’ is incorrect.

Option (c):

The economics is not the study of how to predict the inflation, unemployment and stock price. The inflation, unemployment and stock price are important like other factors but not the preliminary factors. So this is not a best definition of economics. Thus, the option ‘c’ is incorrect.

Option (d):

The economy consists of how the scars recourses are allocated or managed. It is not the study of how the government can stop the harm from unchecked self- interest. Thus, the option ‘d’ is incorrect.

Economics Concept Introduction

Concept introduction:

Economics: Economics refers to the study of how the individual, society and organization decide to allocate its limited available resource to produce finished goods and services in order to satisfy its unlimited demands.

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