Econ Ch 1 Review

Scarcity is the basic economic problem because

• the prices of everything are so high that people cannot afford to buy all of the things they would like to have.

• society does not have enough resources to produce all the things people would like to have.

• people do not have enough money to buy everything they would like to have.

The study of how people try to satisfy the fundamental problem of scarcity is called ________.

Which of these would be classified as an economic want rather than an economic need?

• luxury car

• shelter

• food

• clothing

• concert tickets

Which of the statements below are true of services as opposed to goods?

• Only services are intangible because they represent work done for someone.

• Only services are part of a country's wealth.

• Only services are unable to be transferred to others.

• Only services are a type of economic product.

According to the economic way of thinking, ______ is the fundamental economic problem.

What gives something value?

• It must be a physical, tangible good but not a service.

• It has a worth that can be expressed in dollars and cents.

• It has both scarcity and utility, or the capacity to be useful.

• It can have utility without being scarce.

• It can have scarcity without having utility.

The phrase, "there's no such thing as a free lunch," is understand by economists to mean that

• some production costs are so low they can be ignored.

• the production of anything will always consume some scarce resources.

• this is just another way of expressing the "What to Produce" question.

• some things can be produced without using any scarce resources.

When economists refer to the "WHAT to produce" question as one facing all societies, they mean that

• a society cannot produce everything its people want, so it must decide what goods and services to produce.

• government is going to make all of the production decisions.

• we can ignore the cost of production when the government decides this question.

The "_____ to produce" question deals with the way society combines workers and capital goods to produce its goods and services.

The question that addresses the distribution of goods and services a society produces is called the

• "WHY to produce" question.

• "FOR WHOM to produce" question.

• "WHAT to produce" question.

• "HOW to produce" question.