Principles of Economics

1. Scarcity is the basic economic condition that results from society not having enough resources to produce all the things people would like to have. A society's economic system determines

• The way a society organizes its political system

• The way a society aligns technology with scientific goals

• The way a society allocates its scarce resources to produce goods and services

• The way a society uses religious resources to supplement economic goods and services

An opportunity cost is

•  Usually absent in a command economy
• When goods are recycled into other goods
•    The next-best alternative you give up in order to do something else
•  only an issue when there is not a scarcity of goods and resources  

The study of how individuals, institutions, and society make optimal choices under the conditions of scarcity. The study of how people get what they want.

• Allocation

• Deregulation

• Economics

The BEST explanation of why there will always be scarcity is because

•  People and their tools are inefficient
• Governments create scarcity to keep people wanting more
•  While people's' wants are unlimited, resources are limited

 Bart has decided to buy some water balloons rather than get an extra milk at lunch. Choosing among economic alternatives is referred to as

• Scarcity
• Trade - Off
• Interdependence

In economics, land refers to the natural resources needed for production, such as forests, minerals, and climate.

• True
• False

 The basic economic condition that exists when unlimited wants exceed limited productive resources is called

• Capital
• Scarcity
• Hyperinflation

Which would be most likely to be a “consumer good?”

• Lumber
• Iron Ore
• Chainsaw

Mr. Stevens owns a building in downtown Bentonville. He has considered opening a sporting goods store in the building but has also been approached by someone who would like to rent the space to open a gym. If Mr. Stevens decides to open his sporting goods store, what is the opportunity cost of this decision?

• The opportunity to rent it to another tenant
•  The property tax he would pay on the building 
• The opportunity he has to run his own business

1.2 The study of economics is important because it enables us to

• Describe our standard of living
• Increase our consumption of consumer goods
• Become better decision makers