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The households and societies face many decisions because ……

• resources are scarce.

   

• Goods and services are not scarce.

   

• incomes fluctuate with business cycles.

   

• people, by nature, tend to disagree.

   

The study of how society manages its scarce resources is known as:

• production methods.

• Economics

• how households decide who performs which tasks.

• the interaction of business and government.

The word “equality” is used to describe a situation in which

• each member of society has the same income.

• each member of society has access to abundant quantities of goods and services, regardless of his or her income.

• society is getting the maximum benefits from its scarce resources.

   

• society's resources are used efficiently.

   

The property of society getting the most it can from its scarce resources is called

• equity

• efficiency

• equality

• efficacy

People say that "There is no such thing as a free lunch," means

• even people on welfare have to pay for food.

• the cost of living is always increasing.

• people face tradeoffs.

• all costs are included in the price of a product.

The term opportunity cost is known as:

• the number of hours needed to earn money to buy the item.

• what you give up to get that item.

• usually less than the dollar value of the item.

• the dollar value of the item.

A rational decision maker takes an action only if the

• marginal benefit is less than the marginal cost.

• marginal benefit is greater than the marginal cost.

• average benefit is greater than the average cost.

• marginal benefit is greater than both the average cost and the marginal cost.

“When the price of an apple rises, people decide to eat fewer apples” mean people respond to

• Laws

• incentives.

• punishments more than rewards.

• rewards more than punishments.

Which of the following statements about trade is true EXCEPT?

• Trade increases competition.

• With trade, one country wins and one country loses.

• Bulgaria can benefit, potentially, from trade with any other country.

• Trade allows people to buy a greater variety of goods and services at lower cost.

   

The  invisible hand is found by

• Isaac Newton.

• Adam Smith.

• Philip Kotler.

• Karl Marx.