Question

[9] An opportunity cost:
A) exists only for decisions involving expenditures of money.
B) exists because there is only one way money and time can be spent.
C) is equal to the value of what is given up to make a purchase or take an action.
D) accompanies every decision made by individuals and businesses, but not by government because that reflects the wishes of society.

[10] The opportunity cost of a purchase is:
A) zero if the item is what you want most.
B) always equal to the selling price of the acquired item.
C) always greater for people who are out of work than for people who are working.
D) the alternative good or service that must be given up because this item is purchased.

[11] Increasing efficiency will:
A) increase the problem of scarcity.
B) reduce the problem of scarcity.
C) eliminate the problem of scarcity.
D) have no effect on the problem of scarcity because there is a fixed supply of resources.

[12] Questions about equity are difficult to answer because people:
A) have different value judgments about what is fair.
B) disagree over how fairness can be achieved.
C) disagree over whether fairness should be an economic goal.
D) all of these answers are correct.

[13] Efficiency and equity:
A) can never be achieved at the same time because increasing equity necessarily reduces efficiency.
B) can always be achieved at the same time because increasing efficiency automatically increases equity.
C) are separate goals that can be pursued independently.
D) none of these answers are correct.

[14] An engineer employed by a city is an example of:
A) land.
B) labor.
C) capital.
D) entrepreneurship.

[15] When classifying factors of production, capital refers to:
A) stocks, bonds, and money
B) machinery and equipment to produce goods and services
C) the financial payments by an entrepreneur to start a business.
D) all of these answers are correct

[16] The basic economic decisions are faced:
A) in every economy because of scarcity.
B) in every economy because every society has a formal government.
C) only in market economies since no decision making is allowed in planned economies.
D) only in advanced economies where enough goods and services are produced to force people to make choices.

[17] The basic economic decisions:
A) apply only to less-developed economies where scarcity is a real problem.
B) relate to what is to be produced and how well it satisfies consumer demand.
C) are decisions about production and distribution that must be made by every society.
D) differ in every society; that is, some societies face only one basic decision while others face two or three.

[18] The way a society is organized to make the basic economic decisions is referred to as its:
A) output strategy.
B) economic system.
C) production network.
D) social-economic structure.

[19] With reference to the basic economic decisions, all economies must determine:
A) what goods and services households want to purchase.
B) what methods and techniques to use to produce goods and services.
C) how taxes will be used to redistribute income among the population.
D) how much control elected officials have in deciding what goods and services to produce

Answer 1

Q9) option C).

Opportunity cost is defined as the cost of the second best alternative , that is given up for the chosen action

Q10) option D

Q11) option B)

Efficiency imply using the scarce resources in the way so as to produce maximum out of given resources.

Q12) option D)

Equity is defined differently by every person, no common view exists.

Q13) option A

There always exists a trade off between the efficiency & equity

Q14) option c).

Employing engineers are capital to the firm .

Q15) option B

Capital usually mean the physical tools, plants and equipment that allow for increased work productivity.

Q16) option A

Q17) option C

Q18) option B

Q19 ) option B