topic 1 part 1

Resources are

• scarce for households but plentiful for economies.

• plentiful for households but scarce for economies.

• scarce for households and scarce for economies.

• plentiful for households and plentiful for economies.

Economics deals primarily with the concept of

• scarcity.

• money.

• poverty.

• banking.

The phenomenon of scarcity stems from the fact that

• most economies’ production methods are not very good.

• in most economies, wealthy people consume disproportionate quantities of goods and services.

• governments restrict production of too many goods and services.

• resources are limited.

When a society cannot produce all the goods and services people wish to have, it is said that the economy is ex-periencing

• scarcity.

• surpluses.

• inefficiencies.

• inequalities.

Economics is the study of

• production methods.

• how society manages its scarce resources.

• how households decide who performs which tasks.

• the interaction of business and government.

The adage, "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.

Which of the following statements best represents the principle represented by the adage, "There is no such thing as a free lunch"?

• Melissa can attend the concert only if she takes her sister with her.

• Greg is hungry and homeless.

• Brian must repair the tire on his bike before he can ride it to class.

• Kendra must decide between going to Colorado or Cancun for spring break.

The principle that "people face tradeoffs" applies to

• individuals.

• families.

• societies.

• All of the above are correct.

When society requires that firms reduce pollution, there is

• a tradeoff because of reduced incomes to the firms' owners and workers.

• a tradeoff only if some firms are forced to close.

• no tradeoff, since the cost of reducing pollution falls only on the firms affected by the requirements.

• no tradeoff, since everyone benefits from reduced pollution.

Economists use the word equality 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.