Econ 1

Economics is about making choices.

• True
• False

Scarcity arises because all societies have

• limited productive resources to satisfy unlimited wants
• unlimited productive resources to satisfy limited wants
• limited needs and unlimited wants
• unlimited needs and limited wants

Economics is the study of how

• gov't allocates scare resources to satisfy people's unlimited wants.
• gov't supplies money to businesses to produce goods & services.
• people use their scarce resources to satisfy their unlimited wants.
• businesses supply unlimited goods & services with limited resources.

A study that examines how price and output are determined in the market for breakfast cereal would involve

• socioeconomics
• microeconomics
• marginal economics
• macroeconomics

The opportunity cost of a chosen item or activity is

• the money you must give up to buy it
• the value of all alternatives you must pass up
• The value of the best alternative you must pass up.
• the money you lost by not choosing the least expensive option.

To decide whether to have dessert, you consider the extra time you would spend eating the dessert and the extra calories, both of which are part of the ___ of this decision.

• opportunity cost
• capital cost
• marginal cost
• sunk cost

A study of total consumption in the U.S. economy would involve

• normative economics
• microeconomics
• consumer economics
• macroeconomics

The opportunity cost of increasing production from 7 to 9 trucks is

• Scarcity
• 2 boats
• 2 trucks
• 3 boats

The opportunity cost of increasing production from 4 to 7 boats is

• 1 boat
• 2 boats
• 2 trucks
• 3 trucks

What does point Y represent on the PPC?

• Efficiency
• Unattainable / impossible
• Inefficency
• Nothing