Question

[1] The basic problem that gives rise to the study of economics is the need to:
A) control the effects of actions by foreign governments.
B) be sure all the goods and services produced in an economy get sold.
C) use scarce resources to satisfy people's unlimited material wants and needs.
D) control people's tastes and wishes so that the available resources can produce all the goods and services they want.

[2] Economics is concerned with:
A) earning as much money as possible.
B) limiting individuals' wants so that our scarce resources will not be used up.
C) using scarce resources to satisfy virtually limitless material wants and needs.
D) using as many workers as possible to produce any given level of output.

[3] Which of the following statements is FALSE?
A) Economics is the study of decision making in a world of scarcity.
B) Scarcity is faced by all individuals, businesses, and societies.
C) Scarcity arises because people's wants and needs are virtually unlimited, while the resources available to satisfy those wants and needs are not.
D) Scarcity could be overcome if people were willing to work harder to produce all the goods and services that would satisfy their material wants and needs.

[4] Because resources are scarce, individuals must:
A) learn to do without.
B) make value judgments.
C) try to be more efficient.
D) all of these answers are correct.

[5] Economics is concerned with tradeoffs caused by scarcity. "Tradeoffs" refers to:
A) the alternatives given up when making choices.
B) recycling old goods into new goods to reduce the scarcity problem.
C) the buying and selling that occurs when unwanted goods are exchanged for goods that are desired.
D) the decisions about whether households or businesses should bear the entire burden of the scarcity problem.

[6] The relative importance a person assigns to various actions or alternatives:
A) reflects the person's value judgments.
B) is the same for all people who earn the same income.
C) depends only on the dollar prices of the actions or alternatives.
D) all of these answers are correct.

[7] The opportunity cost of a purchase or a decision is:
A) the lowest possible cost to make that purchase or decision.
B) the highest cost that must be paid to make that purchase or decision.
C) the actual amount paid to make that purchase or decision.
D) what had to be given up to make that purchase or decision.

[8] The opportunity cost of going to school rather than working is the:
A) cost of food and clothing.
B) cost of tuition and housing.
C) cost of getting to and from school.
D) wages which could have been earned.

[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

1.

C

It is the objective of the economics to utilize scarce resources to fulfilled unlimited needs and wants.

2.

C

It is the purpose to create balance between scarce resources and unlimited needs and wants.

3.

D

Scarcity cannot be overcome. It can only be efficiently utilized.

4.

D

All the given alternatives are correct.

5.

A

Here, tradeoff deals with the opportunity cost that comes into the picture, when one alternative is preferred over the others.

6.

A

7.

D

8.

D

PL. repost other unanswered questions for their proper answers!