question

Scarcity of resources relative to human wants

answer

The central problem of economics is the:

question

How best to allocate scarce resources among competing uses

answer

The primary concern of economics is the study of:

question

The factors of production are scarce

answer

Which of the following explains why economic choices must be made?

question

How best to allocate scarce resources

answer

The study of economics focuses on:

question

Food, clothing, gasoline and skilled workers

answer

Which of the following represents a scarce resource?

question

Most desired goods or services that are foregone in order to obtain a particular good

answer

Opportunity cost may be defined as the:

question

Opportunity costs are experienced whenever choices are made

answer

Given that resources are scarce:

question

The next-best alternative use of your time that is foregone

answer

The opportunity cost of playing tennis with your friend is:

question

Resources were no longer scarce

answer

The concept of opportunity cost would become irrelevant if:

question

Choices must be made which involve tradeoffs

answer

If resources are limited:

question

Land, labor, capital, and entrepreneurship

answer

Which of the following are available in limited quantity and contribute to the problem of scarcity?

question

The factors plus technology determine the physical limits to production

answer

Which of the following is true about the factors of production?

question

Scarcity

answer

If society lacks enough resources to satisfy all the desired use of the resources, this is known as:

question

The desire for goods exceeds our capacity to produce them

answer

Scarcity means:

question

We can't produce all the goods and services we want

answer

Societies must address the question of WHAT to produce because:

question

What is the optimal mix of output?

answer

Which of the following is the best example of the "WHAT" economic question?

question

The money hidden in an old basement.

answer

Which of the following is not a factor of production?

question

Goods that can be used to produce other goods

answer

In economics, capital refers to:

question

A computer used by a lawyer to prepare legal documents

answer

In economics, which of the following is the best example of capital?

question

A homebuilder

answer

Which of the following is not an example of land?

question

The skills and abilities of workers

answer

Which of the following is an example of labor as a factor of production?

question

People who are creators

answer

Entrepreneurship refers to:

question

Skill in creating products and services

answer

In economics, which of the following represents entrepreneurship?

question

Scarcity of resources

answer

Output choices are made necessary within a market because of:

question

The production of more military goods may require fewer consumer goods

answer

When economists talk about a tradeoff between "guns and butter," they mean:

question

7.00 houses

answer

[TABLE] In table 1.1, what is the opportunity cost of increasing the production of missiles from 2 to 3 in terms of houses?

question

.25 of a missile

answer

[TABLE] In table 1.1, the opportunity cost of increasing the production of houses from 17 to 21 in terms of missiles per house is:

question

.10 of a missile per house

answer

[TABLE] In table 1.1, the lowest opportunity cost of houses in terms of missiles is:

question

10.00 houses per missile

answer

[TABLE] In table 1.1, the highest opportunity cost of missiles in terms of houses is:

question

Production possibilities are limited for all countries because resources are scarce

answer

Which of the following statements about production possibilities is true?

question

The price level is stable

answer

Which of the following is not an assumption under which the production possibilities curve is drawn?

question

Opportunity cost

answer

The production possibilities curve can be used to illustrate the concept of:

question

Represent the use of all available resources

answer

All points on the production possibilities curve:

question

Of consumer goods will decrease

answer

Ceteris paribus, if Korea increases the size of its military, then its production:

question

Of consumer goods will likely increase

answer

Assuming the level of resources and technology are constant, if France decreases the size of its military, then its production:

question

Consists of the entire production possibilities curve

answer

The most desirable and attainable mix of output for society:

question

Produce the optimal mix of output

answer

In attempting to answer the WHAT question, a society seeks to:

question

The purchase of stock by an individual

answer

Investment refers to all of the following except:

question

A business owner uses his profits to play the lottery and wins

answer

Which of the following is not an example of investment?

question

An expansion of production possibilities

answer

Economic growth always results in:

question

The allocation of some resources to investment rather than consumption

answer

Which of the following is absolutely necessary for economic growth to occur?

question

An outward shift of the production possibilities curve

answer

Economic growth is represented by:

question

Improved technology or more resources or both

answer

The production possibilities curve shifts outward in response to:

question

A more efficient use of existing resources

answer

Ceteris paribus, which of the following will not cause the production possibilities curve to shift outward?

question

Investment in telecommunications networks

answer

Which of the following is likely to cause an outward shift of the production possibilities curve?

question

An outward shift of the production possibilities curve

answer

When technological change allows a smaller amount of a resource to be used in producing two goods shown on a production possibilities curve, there will be:

question

An increase in prices

answer

Ceteris paribus, which of the following is least likely to contribute to economic growth?

question

A decrease in the size of the labor force

answer

Ceteris paribus, which of the following will cause an inward shift of the production possibilities curve?

question

A major earthquake destroys several industrial centers

answer

Which of the following events would cause the production possibilities curve to shift inward?

question

True

answer

The economic problem results from the fact that resources are scarce but human wants tend to be limitless.

question

True

answer

A student's knowledge of computer programming is an example of human capital.

question

False

answer

Profit goes to the owners of capital.

question

False

answer

All goods are scarce but not all services are scarce.

question

False

answer

Product markets refer to specific geographic locations.

question

False

answer

Microeconomics is the study of the economy as a whole.

question

False

answer

People who give to charity cannot be motivated by rational self-interest.

question

True

answer

A decision to go to one college instead of another is an example of a marginal decision.

question

True

answer

Time is a scarce resource.

question

False (Marginal - not total)

answer

Rational self-interest directs people to make any choice for which the total benefits exceed the total costs.

question

False

answer

Good theories contain as many details as possible.

question

True

answer

Assumptions are used to simplify theories by eliminating areas that are not expected to have important effects on the analysis.

question

False

answer

A theory is not good if it cannot predict accurately all the time.

question

True

answer

A positive statement is one that can be verified by reference to facts.

question

False

answer

If one event follows another, then the first event necessarily caused the second event.

question

False

answer

Policymakers generally pay close attention to both the primary and the secondary effects of policies.

question

True

answer

Two variables are independent if increases in one leave the second unchanged.

question

False (Infinity)

answer

The slope of a vertical line is zero.

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