Demand and supply pre2

Recent evidence suggests that Americans are not exercising enough and are eating too much. Using economic reasoning, how would you explain this behavior?

• Americans are lazy.

• Americans cannot resist fatty foods.

• No one has ever told Americans about the advantages of exercise and a healthy diet.

• The overall benefits associated with working in service jobs outweigh the costs of reduced physical activity.

Claire decided to try out for the soccer team last season even though she had a serious knee injury. Her parents and friends have decided that she is crazy. Her friend Linda told Claire that she obviously did not care one bit about her future health.

Using economic reasoning, how would you explain Claire's action?

• Claire had no respect for her health.

• Claire's parents and friends must not care for Claire.

• Claire is prone to make irrational decisions.

• Claire thought that the benefits associated with playing soccer outweighed the costs.

Which of the following statements is not consistent with the concept of scarcity?

• People are scarce because they have many valuable uses in the world.

• Trash is scarce because you rarely see much of it around unless you go to a landfill.

• Knowledge is scarce because what we wish to know is so great relative to what we do know at this time.

• Electricity is scarce because it has many valuable uses.

Which of the following resources was considered scarce in 1000 AD?

• Petroleum

• Aluminum

• Computers

• None of the above

Which of the following people must deal with scarcity when they make decisions during the day?

• The richest person in the world

• A homeless person living in New York City

• A commuter living in the suburbs and working in the city

• All of these people must deal with scarcity

 Shipwrecked survivors on a deserted island, even if they did not have a boat, might consider a wood paddle to be a scarce resource because:

• It reminds them of home.

• It can be burned for heat.

• It can be used for several valuable purposes.

• They would not consider it a scarce resource.

Which of the following statements is not an economic question people in every society must answer?

• What to produce?

• Who decides what is fair?

• How to produce it?

• For whom will it be produced?

 Carla was showing her friend Debbie the new car she had just purchased. She told Debbie that the car cost her a two-month vacation in the Bahamas. Debbie got on Carla’s case. “That is not the cost,” she said; “you gave up $10,000.” If they were talking about opportunity cost, who was correct?

• . Carla

• Debbie

• Both were correct.

• Both were wrong

Everyone must wake up and start the day. Which of the following actions requires people to make a choice among alternatives?

• Take a shower.

• Say “Good Morning” to the family.

• Get dressed.

• All of the actions require people to make choices and consider alternatives.

Economists encourage people to think carefully about decisions because there are no “costless” decisions. Which of the following statements best explains this idea?

• In choosing one alternative, you give up the other alternatives.

• If you choose one alternative, you are forced to pay the money.

• There are no consequences for a poor decision.

• Economists tend to confuse money and consequences.