Economics Midterm Revision chapter 1 res

Which of the following statements relates to the concept of efficiency?

• The absence of waste.

• Using resources as effectively as possible.

• Being able to produce more of one good only by producing less of something else.

• B and C only.

• All of the above.

Which of the following best describes an economically optimal decision?

• A decision that balances efficiency and sustainability.

• A decision that maximizes overall benefits, considering costs and gains.

• A decision that prioritizes environmental concerns over efficiency.

• A decision that uses the least amount of resources, regardless of the outcome.

In the context of fisheries, which of the following represents an efficient but NOT sustainable practice?

• Using advanced fishing technology to maximize the catch without depleting fish stocks.

• Limiting fishing to maintain a stable fish population for future generations.

• Catching as many fish as possible using advanced equipment, leading to fishery collapse.

• Implementing policies that distribute fishing rights fairly among communities.

Why does economic optimality necessitate efficiency?

• Because an optimal allocation of resources must minimize waste and maximize benefits.

• Because sustainability is a requirement for economic optimality.

• Because efficiency and sustainability are unrelated.

• Because an optimal decision focuses only on environmental benefits.

Which of the following is an example of a sustainable but not necessarily economically optimal decision?

• A city invests in solar-powered public transport despite higher initial costs.

• A company uses the cheapest materials to maximize short-term profits.

• A factory increases production by using more fossil fuels.

• A country subsidizes industries that cause environmental degradation.

_______ refers to practices that support long-term economic growth without negatively impacting social, environmental, and cultural aspects of the community.

• Sustainability.

• Effectiveness.

• Efficiency.

• Optimality.

_______ occurs when resources are used wastefully, leading to missed opportunities.

• Inefficiency

• Effectiveness

• Competency

• Welfare

Adam Smith was the first writer to systematize the argument for the importance of __________

• human capital investment.

• varying quality of land

• technology.

• markets in allocating resources.

The one who stated that agricultural output could be expanded either by increasing the intensive margin or the extensive margin was _______.

• Adam Smith

• David Recardo

• John Stuart Mill

• Thomas Malthus

John Stuart Mill recognizes the countervailing influence of:

• The growth of knowledge and technical progress

• The population growth rate

• Intensive and extensive margin

• All of the above