Scarcity can best be defined as 

• A Shortage of a product
• Where demand is greater than supply
• Unlimited wants vs Limited resources 
• Limited wants vs unlimited resources 

(3) Which of the following is NOT a consumer good?

• a bulldozer at a construction site
• a Happy Meal at McDonalds
• a pack of Doritos in a vending machine
• a television set for sale at an appliance store

(2) Which of the following resources would economists classify as “capital”?    

• Raw Bauxite in a South African mine 
• A hammer used in framing a house 
• A worker hired to repair engines 
• Trees used to make paper 

The United States has decided to spend more money on military goods and less on education. The opportunity cost for spending more money on military goods would be which of the following?

• the satisfaction of destroying our enemies
• the money used to fund the military
•  money to spend on education
• better paid soldiers

(5) The nation of Namibia is working hard to eliminate poverty in the country. The government has taken ownership of the factors of production, and now everyone is guaranteed a job. Which of the following most likely represents the type of economic system found in Namibia?

• Market
• Command 
• Mixed 
• Traditional 

The law of demand states that

• consumers demand a larger quantity of a good when price is low.
• consumer demand increases when price is low.
• sellers supply a larger quantity of a good when price is high.
• sellers increase supply when price is high.

Movement along the Demand curve to the right is called

• decrease in demand
• decrease in quantity demanded
• increase in demand
• increase in quantity demanded

As the price of a good rises in a market, it acts as a signal:

• consumers that they should buy a greater quantity of the good.
• to producers that they should supply a greater quantity of the good.
• to consumer that they should increase their demand for the good.
• to producers that they should increase their supply of the good.

When the U.S. government purchases a submarine from a company, the government has made a major transaction in the

• factor market
• public market
• product market
• foreign exchange market

The ideal price and level of output occurs where

• Marginal Revenue and Marginal Cost cross
• MR = AVC
• Average Fixed Cost equal ATC
• MR = MT