WorksheetsScarcity, Choices, Opportunity Cost, Incentives
Total questions: 22
Worksheet time: 17mins
Which term is used to describe the study of how people make decisions in a world where resources are limited?
Opportunity Cost
Scarcity
Cost-benefit analysis
Economics
According to economic theory, when does scarcity occur?
when a society has more resources than it needs to produce goods and services
when there are not enough resources to produce all of the things a society would like to have
when inflation occurs and demand for goods and services decreases
when inflation occurs and demand for goods and services increases
When deciding between renovating a water treatment plant or building a new community pool, what is the government most likely to consider?
scarcity vs. resources
wages vs. prices
wants vs. needs
consumers vs. producers
Which of the following best describes an opportunity cost?
the additional cost of producing one additional unit of output
an individual goes to the movies and decides to buy popcorn
the real price of items increases as the value of money decreases
an individual pays for a guitar lesson instead of going to the movies
An incentive
is the opposite of a tradeoff.
could be a reward but could not be a penalty
could be either a reward or a penalty.
could be a penalty but could not be a reward.
The most fundamental economic problem is
security
health.
inflation
scarcity.
Economists point out that scarcity confronts
the rich but not the poor.
the poor but not the rich.
both the poor and the rich.
neither the poor nor the rich.
Economics is best defined as the study of how people, businesses, governments, and societies
make choices to cope with scarcity.
attain wealth.
choose abundance over scarcity.
use their infinite resources.
Scarcity requires that people must
trade
compete
cooperate
make choices.
The ultimate cost of any choice is
the money cost
what someone else would be willing to pay.
the after-tax cost.
the highest-valued alternative forgone.
During the summer you have made the decision to attend summer school, which precludes you from working at your usual summer job in which you normally earn $6,000 for the summer. Your tuition cost is $3,000, books and supplies cost $300, and room and board cost $1,000. The opportunity cost of attending summer school is
$3,300
$4,300
$6,000
$10,300
On Saturday morning, you rank your choices for activities in the following order: go to the library, work out at the gym, have breakfast with friends, and sleep late. Suppose you decide to go to the library. Your opportunity cost is
working out at the gym, having breakfast with friends, and sleeping late.
zero because you do not have to pay money to use the library.
working out at the gym.
not clear because not enough information is given.
You decide to take a vacation and the trip costs you $2,000. While you are on vacation, you do not report to work where you could have earned $750. The opportunity cost of the vacation is
$2,750.
$2,000.
$750.
$1,250
As an economic concept, scarcity applies to
neither time nor money.
both money and time
time but not money
money but not time.
Which is the most accurate definition of the study of economics? Economics is the study of
the distribution of surplus goods to those in need.
affluence in a morally bankrupt world.
ways to reduce wants to eliminate the problem of scarcity
the choices we make because of scarcity.
Because we face scarcity, every choice involves
money
giving up something for nothing
the question "what."
an opportunity cost
The opportunity cost of any action is
the time required but not the monetary cost.
all the possible alternatives forgone.
the highest-valued alternative forgone.
the monetary cost but not the time required.
The term "opportunity cost" points out that
there may be such a thing as a free lunch
executives do not always recognize opportunities for profit as quickly as they should.
any decision regarding the use of a resource involves a costly choice.
not all individuals will make the most of life's opportunities because some will fail to achieve their goals
During the next hour John can play basketball, watch television, or read a book. The opportunity cost of reading a book
equals how much John enjoys the book.
is the value of playing basketball and the value of watching television
is the value of playing basketball if John prefers that to watching television
is how much the book cost when it was purchased.
Misty has the option of purchasing one of three products: Brand A, Brand B, or Brand C. Each costs ten dollars. If she decides that Brand A meets her needs best, then the opportunity cost of this decision is
twenty dollars.
Brand A.
Brand B plus Brand C.
Brand B or Brand C, depending on which is considered the highest-value alternative forgone.
Which of the following is NOT an example of an opportunity cost?
Because David used all of his vacation time to paint his house, he was unable to visit the Caribbean last year
By choosing to attend college, Jean was not able to continue working as an electrician; as a result, she gave up more than $85,000 in earnings while she was in college.
Because Mary is now being paid a higher wage, she can afford to buy a new car even though she is moving into a bigger apartment.
By spending Thursday night studying for an economics exam, a student was unable to complete a homework assignment for calculus class.
From 8 to 11 p.m., Sam can either attend a basketball game, a hockey match or the symphony. Suppose that Sam decides to attend the hockey match and thinks to herself that if she did not go to the match she would go to the symphony. Then the opportunity cost of attending the hockey match is
going to the basketball game.
going to the basketball game.
three hours of time.
going to the symphony.
