Unit #1

When economists speak of scarcity, they are referring to the

• condition in which society is not employing all its resources in an efficient way.

• condition in which people's wants outstrip the limited resources available to satisfy those wants.

• economic condition that exists in only very poor countries of the world.

• condition in which society produces too many frivolous goods and not enough socially desirable goods.

There would be no subject of economics if

• wants and resources were finite.

• wants were finite and resources were infinite.

• wants were infinite and resources were finite.

• wants and resources were infinite.

Minerals, animals, water and forests are all considered to be the resource known as

• Land

• Labor

• Capital

• Entreprenuership

The higher the opportunity cost of attending college,

• the more likely an individual will go to college.

• the more economics classes an individual will take at college.

• the fewer economics classes an individual will take at college.

• the less likely an individual will go to college.

Which of the following is a microeconomics topic?

• the study of how prices are determined in the computer industry

• the study of unemployment in the economy

• the study of how changes in the nation's money supply affect the nation's output

The condition in an economy that makes a "rationing device" a necessity is the fact that

• the economy is organized around free markets.

• the economy is centrally planned by the government.

• scarcity exists.

• there are fewer types of goods than there are people in the economy.

What is the most prominent rationing device you will find at your campus bookstore?

• Price

• limited quantities in stock of each item

• anti-theft tags on the high-priced items

• no anti-theft tags on the high-priced items

Opportunity cost is the value of

• the best forfeited alternative.

• the chosen alternative.

• a free good.

• an economic good.

In all cases, normative economics deals with

• what is.

• what should be.

• relatively small units in the economy.

• aggregates or the entire economy.

Suppose the federal government steps up its program of highway repair and renovation. Millions of people see tangible benefits from this. Economists remind us that those same people eventually must pay higher taxes to fund the highway project, which points out the __________ the project.

• resources used in

• opportunity cost of

• marginal benefits of

• rationing device used in