Week 2 Review (Opp. Cost, Scarcity, Factors of Production)

What is the definition of scarcity?

• Unlimited resources for limited wants

• Limited resources for unlimited wants

• Equal resources and wants

• Abundant resources for all needs

What is an example of a macroeconomic issue?

Which of the following is NOT a focus of economics?

• Efficient resource use

• Maximum satisfaction

• Study of scarcity

• Exploration of outer space

What is an example of a topic studied in microeconomics?

• Inflation

• Economic growth

• Labor markets

• Unemployment

What is the primary difference between positive and normative statements?

• Positive statements are based on opinions, normative on facts.

• Positive statements include value judgments, normative do not.

• Positive statements are based on facts, normative include value judgments.

• Positive statements are theoretical, normative are practical.

The rising price of crude oil on world markets will lead to an increase in gas prices. Is this statement positive or normative?

• Positive

• Normative

• Subjective

• Objective

What is the term for the benefits you might miss out on when choosing one option over another?

• Incentives

• Opportunity cost

• Scarcity

• Decision-making

Who is affected by the condition of scarcity?

• The rich

• Large economies

• All societies

• Producers (ie: businesses)

The difference between scarcity and shortage is

• scarcity is a natural & re-occurring condition; shortage is a man-made condition

• shortage only happens with new products

• shortage is a natural & re-occurring condition; scarcity is a man-made condition

• shortage is the fundamental, universal economic problem

It is the study of the nations economy as a whole.

• Microeconomics

• National economy

• National output

• Macroeconomics