Question

Decisions must frequently be made by​ individuals, organizations, and even nations. Facilitating better​ decision-making is a fundamental goal of economics. The analytical framework advocated by economists that enables one to make informed decisions is calledA. survival of the fittest.B. the science of positive economic analysis.C. the economic way of thinking.D. the science of enlightenment.

Answer 1

Answer:

The correct answer is C. the economic way of thinking.

Explanation:

It is from the recognition of the general principles on which economic behavior rests, that people can develop a basic way of understanding the economic environment.

• Resources are scarce but desires and needs are unlimited, so people must choose. The logical consequence of this condition is that YOU CANNOT HAVE EVERYTHING and that is why people must choose.
• Decisions, therefore, have opportunity costs. This means that each decision implies the rejection of other things, which represents part of the cost of having made a decision in a certain sense.
• People respond to incentives. It is reasonable to think that when people perceive more benefits than costs, we are inclined to make certain decisions. It is said, therefore, that if incentives are inclined to win with certain actions, then it should not surprise us that people respond to them.
• Institutions (formal and informal) establish the "rules of the game" that encourage our decisions. Norms, laws, companies, government, unions, customs or beliefs, impose incentives and limits for economic performance.
• Free and voluntary exchange raises the welfare of society. The economy represents the space where we all (families, businesses and government) exchange some things for others. But it is from the freedom to offer what people want, without imposing the will of one on the other, that the well-being of everyone can improve.