Answer to Question 1
a) Optimization: Optimization refers to the process of choosing the best option from a set of alternatives, given the available information.
b) Equilibrium: Equilibrium is a special situation where everyone is simultaneously optimizing, so that nobody would benefit personally by changing his or her behavior.
c) Empiricism: Empiricism is analysis that is evidence-based as it uses data to test theories and to determine what is causing things to happen in the world.
Answer to Question 2
C