Chapter 1 microeco

Scarcity exists when there is less than an infinite amount of a resource or good.

• True

• False

Approximately 75 percentage of the world’s economies experience scarcity.

• True

• False

Economics is the study of how society manages its scarce resources.

• True

• False

In most societies, resources are allocated by a single central planner.

• True

• False

Economists use the phrase “There is no such thing as a free lunch,” to illustrate how inflation increases prices.

• True

• False

Henry decides to spend two hours playing golf rather than working at his job which pays $8 per hour. Henry’s tradeoff is nothing, because he enjoys playing golf more than working.

• True

• False

Efficiency refers to the size of the economic pie; equity refers to how the pie is divided.

• True

• False

When government policies such as the welfare system try to help the most needy members of society, it increases the productivity of the needy in the society.

• True

• False

When the government redistributes income from the rich to the poor, people work less and produce fewer goods and services.

• True

• False

In economics, the cost of something is the dollar amount of obtaining it.

• True

• False