CHAP 1: MICROECONOMICS

The English word that comes from the Greek word for "one who manages a household" is

• market.

• consumer.

• producer.

• economy.

The word “economy” comes from the Greek word oikonomos, which means

• “environment.”

• “production.”

• “one who manages a household.”

• “one who makes decisions.”

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.

In considering how to allocate its scarce resources among its various members, a household considers

• each member’s abilities.

• each member’s efforts.

• each member’s desires.

• All of the above are correct.

Fundamentally, economics deals with

• scarcity.

• money.

• poverty.

• banking.

Which of the following is correct?

• The word economy comes from the Greek word for “rational thinker.”

• Economists study the management of scarce resources.

• Because economists believe that people pursue their best interests, they are not interested in how people interact.

• All of the above are correct.

The overriding reason why households and societies face many decisions is that

• resources are scarce.

• goods and services are not scarce.

• incomes fluctuate with business cycles.

• people, by nature, tend to disagree.

A society allocates its scarce resources to various uses. These scarce resources include

• land.

• people.

• machines.

• All of the above are correct.

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.

Approximately what percentage of the world’s economies experience scarcity?

• 10%

• 40%

• 85%

• 100%