Question

Which of the following is true about scarcity?

	a.	Scarcity forces us to make choices.
	b.	Scarcity generally does not affect our day-to-day living.
	c.	Scarcity only affects commodities such as oil.
	d.	Scarcity does not affect the superwealthy.

1. We can divide incentives into two paired categories: positive and negative and direct and indirect.

   True

   False

1. Which measure of GDP is used to account for inflation so that GDP figures can be evaluated over time?

   	a.	Nominal GDP
   	b.	the GDP measure that is computed on the basis of the prices of goods and services current at the time the GDP is produced
   	c.	all measures of GDP because they represent changes in prices
   	d.	real GDP

1- Suppose supply and demand are represented by the following equations:

Q_demand = 90-2P       and       Q_supply = P

Find the equilibrium price and quantity.

	a.	90 and 45
	b.	30 and 30
	c.	3 and 84
	d.	45 and 45
	e.	90 and 2
	f.	30 and 90

Answer 1

1 - Option A

Scarcity forces us to make choices

Because of scarcity , we have to make choices in order to satisfy our wants and have to incur the opportunity cost. Hence Option A will be correct

2 - TRUE

The incentives in economics can be divided into two paired groups. Direct / Indirect and Positve / Negative

3 - Option D

Real GDP.

Real GDP adjusts the GDP as per the rate of Inflation. Nominal GDP is calculated at constant rate and does not take into account inflation. All the measures of GDP do not account for inflation. Hence Option D will be correct

4 - Option B

30 and 30

90-2P = P

90 = 3P

30 = P

Q = 90-60

= 30

Hence Option B will be correct