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WorksheetsMicroeconomics
Total questions: 8
Worksheet time: 6mins
Scarcity is best defined as
the difference between limited wants and limited economic resources.
the difference between the total benefit of an action and the total cost of that action.
the difference between unlimited wants and limited economic resources.
the opportunity cost of pursuing a given course of action.
the difference between the marginal benefit and marginal cost of an action.
Which of the following statements describes an economy confronting scarcity?
If more of one good is produced, less of another good must be produced.
An economy can produce a limitless amount of all goods.
All individuals are able to satisfy their consumption desires.
Scarcity is eliminated by government provision of goods.
Scarcity only exists as a problem when there is more than one good to produce.
Assume an economy is using all its available resources efficiently to produce only two goods, X and Y. As more of good X is produced, what happens to the production of good Y?
The production of good Y also increases.
More resources will need to be devoted to producing good Y.
Less of good Y is produced as resources move from producing good Y to producing good X.
The economy can only produce more of good X if there is more labor available.
There will be no loss of good Y produced.
As a factor of production, capital refers to the
money available to start a business
stocks and bonds issued by businesses to raise funds
financial investment of businesses
currency in circulation and deposits in financial institutions
tools and machinery used to produce goods and services
In contrast to a market economy, a command economy relies on which of the following?
The private sector in deciding what goods will be produced
Private ownership of resources
Profits as incentives to make choices
Supply and demand to determine prices
The government to allocate resources
A linear production possibilities curve indicates which of the following?
Constant opportunity costs
Decreasing opportunity costs
Increasing opportunity costs
Diminishing marginal returns
Labor-intensive production
According to the graph above, if a country is currently producing at point X, the opportunity cost of producing another consumer good is
20 capital goods
more than 20 capital goods
fewer than 20 capital goods
20 consumer goods
fewer than 20 consumer goods
Which of the following best defines opportunity cost?
the cost of producing those goods most desired by a given economy
cost of the input mix that will lead to the greatest rate of growth for a given company
amount of one product that must be given up in order to produce another additional unit of another product
use of the least-cost method of production
the cost of labor used in the production process
