Economics Chapter 1-3

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

The assumption of rational self-interest means that

• people choose alternatives that best serve their interests.
• people make choices based on selfishness and greed.
• people make choices without concerns for the interests of others.
• different people will make the same choices, given the same information.

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.

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

• normative economics
• microeconomics
• consumer economics
• macroeconomics

___ is the physical & mental effort used to produce goods & services.

• Labor
• Revenue
• Behavior
• Marginal

The study of how society chooses to use scarce resources to satisfy its unlimited wants and needs.

• Economics

• Microeconomics

• Macroeconomics

• Capital Resource

The study of a single factor of an economy - such as individuals, households, businesses, and industries - rather than an economy as a whole.

• Microeconomics

• Macroeconomics

• Productivity

• Opportunity Cost

The study of an entire economy or one of its principal sectors.

• Macroeconomics

• Microeconomics

• Scarcity

• Factors of Production

A resource used to produce goods and services.

• Factors of Production

• Capital Resource

• Capital Good

• Production Possibilities Curve

The value lost by rejecting one use of resources in favor of another.

• Opportunity Cost

• Production Possibilities Curve

• Factors of Production

• Capital Good