Question 1

Every society must deal with the problem of scarcity because:

Accepted Answer

A)  people do not have enough money to buy everything they need. 
B)  government levies heavy taxes on households and firms. 
C)  human beings become satiated as consumption increases. 
D)  human wants are nearly unlimited relative to the availability of resources. 
E)  productive resources, technology, and labor are unlimited. 
A)  people do not have enough money to buy everything they need. 
B)  government levies heavy taxes on households and firms. 
C)  human beings become satiated as consumption increases. 
D)  human wants are nearly unlimited relative to the availability of resources. 
E)  productive resources, technology, and labor are unlimited. D

Question 2

Which economic concept is illustrated by the saying "You can't have your cake and eat it too"?

Accepted Answer

A)  Private property rights 
B)  Economic freedom 
C)  Scarcity 
D)  Opportunity cost 
E)  Gains from trade 
A)  Private property rights 
B)  Economic freedom 
C)  Scarcity 
D)  Opportunity cost 
E)  Gains from trade D

Question 3

Scarcity is a result of an unfair distribution of income.

Accepted Answer

A) True 
 B)False  False

Question 4

Labor resources include:

Accepted Answer

A)  skilled workers but not unskilled workers. 
B)  unskilled workers but not skilled workers. 
C)  a robot. 
D)  education and training of workers. 
E)  coffee breaks. 
A)  skilled workers but not unskilled workers. 
B)  unskilled workers but not skilled workers. 
C)  a robot. 
D)  education and training of workers. 
E)  coffee breaks.

Question 5

Scarcity is a concept that implies that choices must be made.

Accepted Answer

A) True 
 B)False

Question 6

If you must make a choice about consuming two apples, three oranges, or one candy bar, the opportunity cost of the candy bar is:

Accepted Answer

A)  two apples. 
B)  three oranges. 
C)  two apples and three oranges. 
D)  two apples or three oranges, whichever you prefer more. 
E)  equal to the difference in the prices of the three options. 
A)  two apples. 
B)  three oranges. 
C)  two apples and three oranges. 
D)  two apples or three oranges, whichever you prefer more. 
E)  equal to the difference in the prices of the three options.

Question 7

A person has a comparative advantage in producing a good if that person:

Accepted Answer

A)  can produce the good at a lower absolute cost than anyone else. 
B)  can produce the good at a lower opportunity cost than anyone else. 
C)  can do a better job than anyone else. 
D)  spends more money in out-of-pocket expenses than anyone else. 
E)  can produce the good at a higher opportunity cost than anyone else. 
A)  can produce the good at a lower absolute cost than anyone else. 
B)  can produce the good at a lower opportunity cost than anyone else. 
C)  can do a better job than anyone else. 
D)  spends more money in out-of-pocket expenses than anyone else. 
E)  can produce the good at a higher opportunity cost than anyone else.

Question 8

A skilled worker is an example of:

Accepted Answer

A)  unproductive resources. 
B)  land resources. 
C)  labor resources. 
D)  capital resources. 
E)  both labor and capital resources. 
A)  unproductive resources. 
B)  land resources. 
C)  labor resources. 
D)  capital resources. 
E)  both labor and capital resources.

Question 9

To an economist, scarcity means that:

Accepted Answer

A)  it is very time-consuming to find a good. 
B)  at a zero price, the available quantity of a good is insufficient to meet people's wants. 
C)  a good is unavailable even at very high prices. 
D)  at the current market price, the amount available is less than the amount that people want and are willing to pay for. 
E)  resources are unlimited but people's desires are limited. 
A)  it is very time-consuming to find a good. 
B)  at a zero price, the available quantity of a good is insufficient to meet people's wants. 
C)  a good is unavailable even at very high prices. 
D)  at the current market price, the amount available is less than the amount that people want and are willing to pay for. 
E)  resources are unlimited but people's desires are limited.

Question 10

Which of the following is true of resources?

Accepted Answer

A)  Capital resources include manual labor. 
B)  Natural resources are available in nature and are available at a zero price. 
C)  Labor includes the skills and training people acquire to use in production. 
D)  Technological know-how is an example of a natural resource. 
E)  Human capital is the technical term for a robot. 
A)  Capital resources include manual labor. 
B)  Natural resources are available in nature and are available at a zero price. 
C)  Labor includes the skills and training people acquire to use in production. 
D)  Technological know-how is an example of a natural resource. 
E)  Human capital is the technical term for a robot.

Question 11

Which of the following would economic freedom lead to?

Accepted Answer

A)  A higher standard of living 
B)  Better living conditions 
C)  Longer life expectancy 
D)  Better education 
E)  All of these 
A)  A higher standard of living 
B)  Better living conditions 
C)  Longer life expectancy 
D)  Better education 
E)  All of these

Question 12

It can be said that ____ laid the foundation for the Industrial Revolution.

Accepted Answer

A)  the discovery of the Americas 
B)  private property rights 
C)  the invention of the cotton gin 
D)  the discovery of gold 
E)  the development of a strong judicial system 
A)  the discovery of the Americas 
B)  private property rights 
C)  the invention of the cotton gin 
D)  the discovery of gold 
E)  the development of a strong judicial system

Question 13

Which of the following statements is false?

Accepted Answer

A)  Economists look at the factors that lead an individual to decide that a particular idea is in his or her best interest. 
B)  Economists do not ask whether a particular decision is in the individual's best interest. 
C)  Choices must be made because of scarcity. 
D)  A particular choice is made by an individual because that choice provides the greatest satisfaction. 
E)  None of these statements is false, they are all true. 
A)  Economists look at the factors that lead an individual to decide that a particular idea is in his or her best interest. 
B)  Economists do not ask whether a particular decision is in the individual's best interest. 
C)  Choices must be made because of scarcity. 
D)  A particular choice is made by an individual because that choice provides the greatest satisfaction. 
E)  None of these statements is false, they are all true.

Question 14

The concept of scarcity as used by economists refers to:

Accepted Answer

A)  a situation of excess supply. 
B)  a situation in which the available resources are not enough to satisfy the wants of the people at a zero price. 
C)  a situation in which an item is available only in very small quantities. 
D)  a situation in which an item is very expensive. 
E)  a situation in which a resource is nonrenewable. 
A)  a situation of excess supply. 
B)  a situation in which the available resources are not enough to satisfy the wants of the people at a zero price. 
C)  a situation in which an item is available only in very small quantities. 
D)  a situation in which an item is very expensive. 
E)  a situation in which a resource is nonrenewable.

Question 15

Figure 1.3
  
-In Figure 1.3, full employment is shown with:

Accepted Answer

A)  points A, B, and C. 
B)  only point C. 
C)  point D. 
D)  only point A. 
E)  only point B. 
A)  points A, B, and C. 
B)  only point C. 
C)  point D. 
D)  only point A. 
E)  only point B.

Question 16

The major economic problem is to:

Accepted Answer

A)  provide for full employment. 
B)  eliminate scarcity. 
C)  increase the standard of living. 
D)  allocate limited resources among unlimited uses. 
E)  increase leisure. 
A)  provide for full employment. 
B)  eliminate scarcity. 
C)  increase the standard of living. 
D)  allocate limited resources among unlimited uses. 
E)  increase leisure.

Question 17

Private property rights are important because:

Accepted Answer

A)  they create incentives for people to improve their standard of living. 
B)  the Constitution says so. 
C)  they allow students to choose their major field of study in college. 
D)  an economy cannot function without them. 
E)  goods cannot be produced without them. 
A)  they create incentives for people to improve their standard of living. 
B)  the Constitution says so. 
C)  they allow students to choose their major field of study in college. 
D)  an economy cannot function without them. 
E)  goods cannot be produced without them.

Question 18

Which of the following does the production possibilities curve illustrate?

Accepted Answer

A)  The tradeoffs facing a society 
B)  The fact that more of one product can be produced only by reducing the quantity of other products that are being produced, assuming that resources are being used efficiently 
C)  The maximum output that can be produced with a limited amount of resources 
D)  The opportunity cost of alternative choices 
E)  All of these 
A)  The tradeoffs facing a society 
B)  The fact that more of one product can be produced only by reducing the quantity of other products that are being produced, assuming that resources are being used efficiently 
C)  The maximum output that can be produced with a limited amount of resources 
D)  The opportunity cost of alternative choices 
E)  All of these

Question 19

Choices need to be made because of all of the following, except limited _____.

Accepted Answer

A)  resources 
B)  income 
C)  wants 
D)  time 
E)  availability of goods 
A)  resources 
B)  income 
C)  wants 
D)  time 
E)  availability of goods

Question 20

_____ is the primary reason that explains why some nations are richer than the others.

Accepted Answer

A)  A democratic government 
B)  A strong judicial system 
C)  Access to education 
D)  Private ownership 
E)  A stable currency 
A)  A democratic government 
B)  A strong judicial system 
C)  Access to education 
D)  Private ownership 
E)  A stable currency

Exam 1: The Wealth of Nations: Ownership and Economic Freedom

Every society must deal with the problem of scarcity because:

Which economic concept is illustrated by the saying "You can't have your cake and eat it too"?

Scarcity is a result of an unfair distribution of income.

Labor resources include:

Scarcity is a concept that implies that choices must be made.

If you must make a choice about consuming two apples, three oranges, or one candy bar, the opportunity cost of the candy bar is:

A person has a comparative advantage in producing a good if that person:

A skilled worker is an example of:

To an economist, scarcity means that:

Which of the following is true of resources?

Which of the following would economic freedom lead to?

It can be said that ____ laid the foundation for the Industrial Revolution.

Which of the following statements is false?

The concept of scarcity as used by economists refers to:

Figure 1.3 -In Figure 1.3, full employment is shown with:

The major economic problem is to:

Private property rights are important because:

Which of the following does the production possibilities curve illustrate?

Choices need to be made because of all of the following, except limited _____.

_____ is the primary reason that explains why some nations are richer than the others.

Scarcity and Opportunity Costs

The Market and Price System

The Aggregate Economy

National Income Accounting

An Introduction to the Foreign Exchapterange Market and the Balance of Payments

Unemployment and Inflation

Macroeconomic Equilibrium: Aggregate Demand and Supply

Aggregate Expenditures

Income and Expenditures Equilibrium

Fiscal Policy

Money and Banking

Monetary Policy

Macroeconomic Policy: Tradeoffs, Expectations, Credibility, and Sources of Business Cycles

Macroeconomic Viewpoints: New Keynesian, Monetarist, and New Classical

Economic Growth

Development Economics

Globalization

World Trade Equilibrium

International Trade Restrictions

Exchapterange Rates and Financial Links Between Countries

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