Using economic analysis to help understand world issues
A) assumes that all decision makers use detailed economic analysis
B) highlights the role of choice when resources are scarce
C) has unlimited application
D) is not appropriate because reality is too complex for economic modeling
E) typically enables one nation to gain only when another nation loses

Question

Quizplus · Accepted Answer

Economic analysis recognizes the fundamental problem of scarcity and how people make choices based on limited resources. It is a useful tool in understanding world issues such as trade, inequality, and poverty. However, it does not assume that all decision makers use detailed economic analysis, nor is it unlimited in application. Economic analysis can also take into account the complexity of reality, but this may require more sophisticated modeling techniques. Finally, economic analysis does not typically involve one nation gaining at the expense of another nation, as trade can be mutually beneficial.

Using Economic Analysis to Help Understand World Issues