Economics may best be defined as the
A) interaction between macro and micro considerations.
B) social science concerned with how individuals, institutions, and society make optimal choices under conditions of scarcity.
C) empirical testing of value judgments through the use of logic.
D) study of why people are rational.

Question

Quizplus · Accepted Answer

Economics is a social science that studies how people make choices to fulfill their unlimited wants with limited resources or under conditions of scarcity. It includes the study of individual decision-making as well as that of institutions and society as a whole. The study of economics helps understand the behavior of individuals and groups in the markets and the allocation of resources that affect the economic system. Therefore, option B is the best definition of economics. Option A is incorrect because macro and micro considerations are part of the study of economics, but not the definition. Option C is incorrect because economics is more concerned with positive statements and testing of theories than value judgments. Option D is incorrect because rationality is an assumption in economic theory, but not the only focus of the discipline.

Economics May Best Be Defined as the