Economics Module 1

A surplus typically indicates that 

• government price controls are needed.
• the market is in equilibrium. 
• the price is too high.
• suppliers cannot meet the demand.  

When "thinking like an economist", one should accept an option when 

• the benefits outweigh the costs.
• the costs outweigh the benefits.
• there are no costs.
• there are no marginal costs.  

Which type of resource is a factory building?

• capital resource 
• intermediate resources 
• human resource 
• natural resource 

Which of the following directly causes a change in demand?

• lower cost of production 
• new technology 
• number of consumers 
• number of producers 

According to the rule of marginal analysis, one should continue producing a good or service until the 

• marginal cost is equal to the marginal revenue. 
• marginal cost is less than the marginal revenue.  
• total cost is equal to the total revenue.  
• total cost is more than the total revenue.  

Scarcity is the basic economic problem because

• all expensive goods cannot be shared equally.  
• all resources are limited, but wants are not.
• nations must spend money for resources they do not have.
• people face shortages on a seasonal basis.  

Which of the following is an example of WHAT to produce? 

• hiring new workers
• printing new textbooks 
• regulating air pollution caused by factories 
• sample 

Giving up one alternative good or service for another is called 

• an opportunity cost 
• a scarcity 
• a trade-off 
• a want 

Which of the following is an example of a resource?

• deck 
• fence 
• house 
• wood 

What are the three economic questions all societies must answer?

• what, how, and for whom to produce 
• when, where, and how to produce 
• where, why, and how many to produce 
• why, what, and where to produce