Economics Quiz

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

• scarcity

• surpluses

• inefficiencies

• inequalities

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.

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.

Efficiency means that

• society is conserving resources in order to save them for the future.

• society's goods and services are distributed equally among society's members.

• society's goods and services are distributed fairly, though not necessarily equally, among society's members.

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

When computing the opportunity cost of attending a concert you should include

• the price you pay for the ticket and the value of your time.

• the price you pay for the ticket, but not the value of your time.

• the value of your time, but not the price you pay for the ticket.

• neither the price of the ticket nor the value of your time.

Denise decides to spend three hours working overtime rather than watching a video with her friends. She earns $10 an hour. Her opportunity cost of working is

• the $30 she earns working.

• the $30 minus the enjoyment she would have received from watching the video.

• the enjoyment she would have received had she watched the video.

• nothing, since she would have received less than $30 of enjoyment from the video.

Making rational decisions "at the margin" means that people

• make those decisions that do not impose a marginal cost

• evaluate how easily a decision can be reversed if problems arise.

• compare the marginal costs and marginal benefits of each decision.

• always calculate the dollar costs for each decision.

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.

You are considering staying in college another semester so that you can complete a major in economics. In deciding whether or not to stay you should

• compare the total cost of your education to the total benefits of your education.

• compare the total cost of your education to the benefits of staying one more semester.

• compare the cost of staying one more semester to the benefits of staying one more semester.

• compare the total benefits of your education to the cost of staying one more semester.

In the circular-flow diagram, which of the following is not a factor of production?

• labor

• land

• capital

• money