Ten Principles of Economics-Part 1

Scarcity means that there is less of a good or resource available than people wish to have

• True

• False

Trade­offs are required because wants are unlimited and resources are

• plenty

• efficient

• scarce

• economical

Opportunity cost is the cost or the price you pay for a good or service

• True

• False

A rational decision maker takes an action if and only if the marginal cost exceeds the marginal benefit

• True

• False

Economics is the study of

• production methods

• how society manages its scarce resources

• how households decide who performs which tasks

• the interaction of business and government