Econ - Unit 1 Basic Economic Concepts

What is the focus of microeconomics?

• The behavior of the economy as a whole

• The study of decisions that people and businesses make regarding the allocation of resources and prices of goods and services

• The study of how people try to satisfy unlimited and competing needs and wants

• The study of specific companies only

What does macroeconomics study?

• The allocation of resources and prices of goods and services

• The behavior of specific companies only

• The behavior of the economy as a whole, including entire industries and economies

• How people satisfy their needs and wants

Economics is best described as the study of:

• Business management and company strategies

• Government policies and regulations

• How people use scarce resources to satisfy unlimited and competing needs and wants

• International trade and finance

What does the acronym TINSTAAFL stand for?

• There is no such thing as a free lunch

• This is not suitable for all audiences

• There is no standard approach for learning

• This is not the same as a factual lie

What is the main idea expressed by the acronym TINSTAAFL?

• Free lunches are not common in society

• Even if something appears to be free, there is always a cost associated with it

• Acronyms are useful for remembering complex ideas

• Decision-making should not involve costs

What is scarcity in economic terms?

• The abundance of resources to satisfy wants and needs

• The equitable distribution of wealth

• Not enough resources to satisfy everybody's wants and needs

• The efficient use of resources to produce goods

Is scarcity caused by a shortage of money?

• Yes, scarcity is directly related to the amount of money available

• No, scarcity is not caused by a lack of money, but by a lack of resources needed to make all the things people want

• Yes, scarcity only occurs in poor economies

• No, scarcity is a result of poor government policies

What is a need?

• A) A luxury item that is desirable but not essential for living.

• B) A basic requirement for survival that you have to have.

• C) A service that is often expensive and not necessary.

• D) A leisure activity that one enjoys during free time.

What is a want?

• A) Something that is essential for living and cannot be done without.

• B) A basic requirement for survival.

• C) A desire that can be satisfied by consuming a good, service, or leisure activity.

• D) An item that is necessary for one's profession or job.

What are the three basic questions society must answer due to limited resources?

• What to buy? How to use? Why to produce?

• What to produce? How to produce? For whom to produce?

• When to produce? Where to produce? Who to produce?

• Why to produce? What to consume? How to distribute?