Basics For Econ

Detailed knowledge about production and distribution of most products

• is concentrated in a small team of managers

• is spread among many people who may not even know each other

• is collected and summarized by the Department of Commerce

• is easily obtained from teh internet

In exchange between two people

• both people believe they are benefitting

• one person's gain is the other's loss

• both people lose

• no one really benefits or loses

Which of the following illustrates a market?

• A person buying a milk shake at an ice cream store

• Someone using a mail-order catalog, telephone, or credit card to buy clothing

• none of the above

• Both of the above

The unemployment rate is subject of

• microeconomics

• macroeconomics

• opportunity cost

• marginal cost and benifit

Ina market economy, what organizes and coordinates the production of goods and services?

• Exchange

• Scarcity

• Government

• Banks

Economist say that scarcity is a relative concept. This means that

• resources are scarce only in poor societies

• scarce and limited resources are identical

• the scarcity of resources can change if wants or amounts of resources available change

• market economies usually eliminate scarcity

Which of the following would be a good?

• A Haircut

• A pair of scissors

• A visit to a doctor

• Advice from a lawyer

Opportunity cost

• does not relate to the use of one's time

• is a change in prices

• is defined as the amount of money spent to buy something

• is the highest valued alternative given up whenever someone makes a choice

Which of the following is not one of the basic choices that people in all societies must make?

• What things to produce

• What should be done with resources

• Who will receive the goods and services

• How things should be produced

The owner of a new store wants to know whether she should increase the store's advertising spending. The owner should do so if estimates show

• The marginal cost of advertising is less than the marginal benefit

• There are no marginal cost of advertising

• The marginal benefit and marginal cost of adverting is equal

• Adverting will bring in more customers