Chapter 38 — Quiz

Q1. The Easterlin paradox says: a) Money always makes people happier b) Above a moderate income, more money has diminishing effects on happiness c) Poor people are happier than rich people d) GDP measures happiness perfectly Q2. Hedonic adaptation means: a) People never adapt b) People adapt to both gains and losses, returning to a baseline happiness level c) Adaptation is always positive d) Only rich people adapt Q3. Sen's capability approach evaluates welfare by: a) Income alone b) What people can do and be (capabilities), not just what they consume c) GDP per capita d) Stock market performance Q4. The chapter's central claim is: a) Economics is the only useful tool b) Economics is useless c) Economic thinking is powerful but should be used alongside other ways of thinking, with humility d) Markets solve everything

SA1. State the Easterlin paradox in one sentence. SA2. What is the difference between economic efficiency and human flourishing?

TF1. Doubling income doubles happiness. (T/F) TF2. Markets are good at valuing friendship and community. (T/F) TF3. Economics done with humility is the most useful social science. (T/F)

Selected answers in appendices/answers-to-selected.md.