Question 1

Which of the following is a microeconomic issue?
A) Growth in the U.S. economy slowed.
B) Increased federal government expenditures have lowered the unemployment rate.
C) The inflation rate fell this year.
D) The quantity of wheat grown in the United States increases this year.
E) The U.S. government cuts taxes to combat a recession.

Accepted Answer

The quantity of wheat grown in the United States increasing is a microeconomic issue because it pertains to a specific market (the wheat market) and focuses on supply and demand within that market. A microeconomic issue deals with individual markets and specific economic agents, while macroeconomic issues deal with the economy as a whole. The other options are macroeconomic issues as they focus on the economy as a whole or government-wide policies.

Question 2

Scarcity forces people to
A) choose among available alternatives.
B) cheat and steal.
C) be unwilling to help others.
D) live at a low standard of living.
E) consume as much as they can as quickly as they can.

Accepted Answer

Scarcity means that there are limited resources to fulfill unlimited wants and needs. This forces individuals to make choices among the available alternatives, considering what is most important to them and what can be sacrificed. This is the fundamental concept behind economics and the reason why the study of scarcity is so important in understanding how individuals and societies allocate resources.

Question 3

The primary focus of microeconomics is
A) to examine the operation of the entire (aggregate) economy.
B) to examine the behavior and operation of the individual units or sectors that make up the economy.
C) our government's monetary policy.
D) the levels of employment and inflation.
E) to study how we managed to eliminate scarcity.

Accepted Answer

Microeconomics focuses on analyzing the behavior and operation of individual units or sectors within the economy, such as households, firms, and markets. It is concerned with topics such as supply and demand, pricing, production, and consumer behavior.

Question 4

Which of the following is a microeconomic issue?
A) The price of gasoline increases in the United States this year.
B) The Brazilian economy experiences rapid economic growth.
C) The unemployment rate soars in Spain.
D) Inflation skyrockets in Russia.
E) The U.S. government cuts taxes to combat a recession.

Accepted Answer

The price of gasoline increasing in the United States is a microeconomic issue because it directly affects individual consumers and businesses. Microeconomics deals with analyzing the behavior of individual markets and the decisions made by individual economic agents such as consumers and firms. The other options are macroeconomic issues as they relate to the overall economy or large-scale trends.

Question 5

Which of the following statements best describes the study of economics? Economics studies how
A) to organize production so that scarcity does not occur.
B) firms make profits.
C) we make choices in the face of scarcity.
D) to create incentives so that scarcity does not exist.
E) businesses reach decisions.

Accepted Answer

Economics is the social science that studies how individuals, businesses, and societies make optimal choices in the face of scarcity. It is concerned with the allocation of scarce resources among competing uses.

Question 6

Scarcity exists because
A) human wants exceed the resources available to satisfy them.
B) some individuals have low income.
C) the costs of production are high.
D) some people make bad economic decisions.
E) people take too much leisure time.

Accepted Answer

Scarcity is the fundamental economic problem where the resources like land, labor, and capital are finite, but human wants are infinite. Therefore, it creates a situation where people have to make choices and trade-offs to allocate resources effectively to satisfy their needs and wants. The other options (B, C, D, and E) are not the primary reasons for scarcity in the economy.

Question 7

Because human wants are insatiable and unlimited while available resources are limited,people are said to face the problem of
A) scarcity.
B) why to produce.
C) macroeconomics.
D) microeconomics.
E) social interest versus self-interest.

Accepted Answer

Scarcity refers to the situation where there are limited resources to satisfy unlimited wants, and therefore individuals and societies have to make choices about how to allocate these scarce resources among competing uses. The problem of scarcity is central to the study of economics and is a key driver of many economic phenomena, such as supply and demand, prices, and market outcomes.

Question 8

Scarcity means that
A) what we can produce with our resources is greater than our material wants.
B) resources are unlimited.
C) wants are greater than what we can produce with our resources.
D) governments must make up for shortages in resources.
E) choices made in self-interest cannot be the same as those made in the social interest.

Accepted Answer

Scarcity refers to the imbalance between unlimited wants and limited resources to satisfy those wants. Choice C correctly identifies this relationship. Choices A, B, D, and E do not accurately define scarcity.

Question 9

Which of the following statements best describes the study of economics? Economics studies how
A) to organize production so that scarcity does not occur.
B) firms make profits.
C) we make choices in the face of scarcity.
D) to create incentives so that scarcity does not exist.
E) businesses reach decisions.

Accepted Answer

Economics is the study of how individuals and society allocate scarce resources to satisfy their unlimited wants and needs. Scarcity is the fundamental concept in economics and it refers to the fact that resources are limited, while wants and needs are unlimited. Therefore, economics is concerned with how we make choices in the face of scarcity.

Question 10

Scarcity
A) is the inability to satisfy all our wants.
B) leads to higher prices.
C) applies only to people living in poverty.
D) is not something that affects very rich people.
E) used to exist everywhere but has been eliminated in advanced economies.

Accepted Answer

Scarcity refers to the limited availability of resources, which results in the inability to satisfy all our wants. This means that we must make choices and prioritize which wants and needs are most important to us. It also leads to higher prices since goods and services become more valuable due to their limited supply. Scarcity applies to all people, regardless of income level, as there are always more wants than resources available to fulfill them. While advancements and improvements in technology and production have helped alleviate scarcity to some extent, it still exists in every economy.

Question 11

The study of economics is best described as a study of
A) the factors that influence the stock and bond markets.
B) capitalism.
C) the choices made in producing goods and services.
D) coping with scarcity, and choices made as a result of scarcity in a society.
E) how people earn a living.

Accepted Answer

Economics deals with the allocation of scarce resources to satisfy unlimited wants. The study of economics is essentially the study of how to cope with scarcity and the resultant choices that individuals, firms, and societies make to satisfy their needs and wants. Choices made in the production of goods and services are a key aspect of economics, as is the allocation of resources to ensure efficient and effective production. Capitalism is a system that is often used to organize economic activity, but it is not synonymous with economics. The study of economics goes beyond the single issue of earning a living, and it includes a broad range of topics, including macroeconomics, microeconomics, finance, and international trade. Finally, while the stock and bond markets are important aspects of economic activity, they are only a small part of the overall field of economics.

Question 12

Economics is best defined as the social science that studies
A) how a person can get everything he or she wants.
B) the reason money exists.
C) the way to eliminate choices in our decisions.
D) the choices that societies, and the people and institutions that make up societies, make in dealing with the issue of scarcity.
E) how choices made in the social interest must conflict with choices made in the self-interest.

Accepted Answer

Economics is primarily concerned with the choices that societies and individuals make in allocating scarce resources. It studies how different individuals, households, firms, and governments make decisions to allocate resources efficiently to satisfy their wants and needs. Furthermore, economics also involves the study of the production, consumption, and distribution of goods and services in the economy.

Question 13

What is the reason that all economic issues and problems occur?
A) All nations use some form of money to buy and sell goods and services.
B) Humans are always wasteful and inefficient in production and consumption.
C) Powerful governments are able to control production and consumption.
D) Human wants exceed the resources available to satisfy them.
E) People seek only their own self-interest.

Accepted Answer

Economic issues and problems occur because human wants and needs are unlimited, while the resources to satisfy these wants and needs are limited. This scarcity leads to the need for choices and trade-offs, creating economic issues and problems.

Question 14

Which of the following is a microeconomic topic?
i.K-Mart's decision to close stores that are not making a profit
ii.Home Depot's choice to hire more full-time employees because its sales increased
iii.Delta Airlines changes its fares.
A) i only
B) ii only
C) i and iii
D) ii and iii
E) i, ii, and iii

Accepted Answer

All three scenarios involve decisions made by individual businesses, which is a focus of microeconomics. Microeconomics studies the behavior of individuals and firms in making decisions regarding the allocation of scarce resources.

Question 15

Which of the following is a microeconomic topic?
A) Northwest Airlines analyzes the benefits of adding one more flight to Salt Lake City.
B) Unemployment soars as taxes increase.
C) The government leaves interest rates unchanged as the economy improves.
D) Germany's government increases taxes to avoid a budget deficit.
E) Chinese economic growth slows.

Accepted Answer

The analysis of adding one more flight by Northwest Airlines pertains to the decision-making of a single firm, which is a microeconomic topic.

Question 16

Microeconomics includes the study of the
A) aggregate effects on the national economy.
B) recessions and inflation in the global economy.
C) choices made by individuals and businesses.
D) reasons why the government changes interest rates.
E) nationwide unemployment rate.

Accepted Answer

Microeconomics focuses on the decisions made by individuals and businesses, including how they allocate resources, set prices, and respond to changes in market conditions. It does not directly examine macroeconomic aggregates such as the nationwide unemployment rate, recessions, or government policy decisions.

Question 17

Which of the following best defines economics?
A) Economics teaches how to limit our wants.
B) Economics studies how to choose the best alternative when coping with scarcity.
C) Economics helps you earn as much money as possible.
D) Economics analyzes all aspects of human behavior in general.
E) Economics is concerned with prices and quantities of goods and services, both at the individual level and at the industry level.

Accepted Answer

Economics is fundamentally the study of how societies deal with scarcity. Scarcity means that resources are limited and cannot meet all of our wants and needs. Therefore, economics is concerned with how people make choices when faced with limited resources, and how those choices affect the production, distribution, and consumption of goods and services. This makes B the most accurate definition of economics.

Question 18

Scarcity means we must
A) consume less.
B) produce less.
C) make choices.
D) earn more.
E) work more.

Accepted Answer

Scarcity means that there are limited resources relative to unlimited wants and needs. This requires individuals, businesses, and governments to make choices about what they will produce, consume, and distribute. Therefore, the best choice in this scenario is to make choices (C). The other options, consuming less (A), producing less (B), earning more (D), and working more (E), may be ways of dealing with scarcity but are not the fundamental solution to the problem of making choices in a world of limited resources.

Question 19

Scarcity requires that we
A) produce efficiently.
B) learn to limit our wants.
C) have the most rapid economic growth possible.
D) have unlimited resources.
E) make choices about what goods and services to produce.

Accepted Answer

The answer of Scarcity requires that we
A) produce efficiently.
B) learn...

Question 20

Economics is the social science that studies
A) the real reasons people buy goods and services.
B) the psychology of individuals and businesses.
C) whether a nation has enough natural resources.
D) how people make choices to cope with scarcity.
E) how choices made in the social interest could eliminate scarcity.

Accepted Answer

Economics primarily studies how people allocate scarce resources to satisfy their unlimited wants and needs. It is concerned with the choices people make, the factors that influence those choices, and the consequences of those choices. The study of economics focuses on analyzing the production, consumption, and distribution of goods and services, and how individuals, businesses, and governments make choices to allocate resources efficiently. Therefore, option D is the most appropriate answer.

Quiz 1: Getting Started

Which of the following is a microeconomic issue?

Scarcity forces people to

The primary focus of microeconomics is

Which of the following is a microeconomic issue?

Which of the following statements best describes the study of economics? Economics studies how

Scarcity exists because

Because human wants are insatiable and unlimited while available resources are limited,people are said to face the problem of

Scarcity means that

Which of the following statements best describes the study of economics? Economics studies how

Scarcity

The study of economics is best described as a study of

Economics is best defined as the social science that studies

What is the reason that all economic issues and problems occur?

Which of the following is a microeconomic topic? i.K-Mart's decision to close stores that are not making a profit ii.Home Depot's choice to hire more full-time employees because its sales increased iii.Delta Airlines changes its fares.

Which of the following is a microeconomic topic?

Microeconomics includes the study of the

Which of the following best defines economics?

Scarcity means we must

Scarcity requires that we

Economics is the social science that studies