Question 1

Freshwater is considered a scarce good because:
A)not enough of it is available for all needs.
B)it does not have any uses.
C)scarce goods are not expensive.
D)not enough of it is available for all needs and because it is not expensive.

Accepted Answer

Freshwater is considered a scarce good because there is not enough of it available to meet all of the demand and needs for it.

Question 2

Manny is attending college and majoring in economics.By doing so,Manny is improving his:
A)land.
B)labor.
C)capital.
D)human capital.

Accepted Answer

By attending college and majoring in economics, Manny is improving his human capital, which refers to the knowledge, skills, and abilities that individuals possess and can use to produce economic value.

Question 3

When we are forced to make choices,we are facing the concept of:
A)human capital.
B)inflation.
C)scarcity.
D)market failure.

Accepted Answer

Scarcity refers to limited resources in comparison to unlimited wants and needs. When we are forced to make choices, it is often because we don't have enough resources (time, money, etc.) to satisfy all of our wants and needs. Therefore, the concept of scarcity applies. A, B, and D are not directly related to the idea of making choices in the face of limited resources.

Question 4

A central and fundamental theme in economics is that:
A)wants are limited.
B)the United States is a rich country,but we are simply not aware of it.
C)people have unlimited wants but limited means to satisfy them.
D)resources are unlimited.

Accepted Answer

This is a fundamental concept in economics that people have unlimited wants, but limited resources to satisfy those wants. It leads to the need to make choices and trade-offs, which are key components of economic decision-making. The other options (A, B, and D) are not central themes in economics.

Question 5

Which resource is NOT one that pertains to the production of rice?
A)fertile land
B)labor
C)capital equipment
D)money

Accepted Answer

While money may be necessary to invest in capital equipment and labor, it is not an actual resource used in the production of rice. The primary resources needed for producing rice are fertile land, labor, and capital equipment.

Question 6

Scarcity exists when:
A)making choices among two or more alternatives is not necessary.
B)individuals can have more of any good without giving up anything.
C)individuals can have more of one good but only by giving up something else.
D)resources are unlimited.

Accepted Answer

Scarcity refers to a situation where the demand for certain goods or services exceeds their availability. This means that individuals have to make choices regarding which goods or services to consume, and this choice requires giving up something else. Therefore, the correct answer is C - individuals can have more of one good but only by giving up something else.

Question 7

Which topic is studied in macroeconomics?
A)the change in automobile sales due to a change in the price of automobiles
B)the effect of a tax reduction on the profits of an individual business
C)recessions
D)the unemployment of workers displaced by technological change in the typesetting industry

Accepted Answer

Macroeconomics studies the overall performance and behavior of the economy as a whole, including topics such as economic growth, inflation, and recessions. Option A is an example of microeconomics, which focuses on individual markets and their behavior. Option B is also an example of microeconomics, as it relates to an individual business. Option D is more specific and does not relate to the broader study of macroeconomics.

Question 8

Which factor can BEST be considered to be a resource used in the production of computers?
A)money from investors
B)wages of computer engineers
C)computer engineers
D)taxes on the profits from the sale of the computers

Accepted Answer

Computer engineers are the best choice as they are directly involved in the production of computers and are essential in the creation and development of computer technology. Money from investors and taxes on profits are financial resources, while wages of computer engineers are a result of their work, rather than a resource used in production.

Question 9

The problem of determining what goods and services society should produce:
A)exists because we can produce more than we need or want.
B)exists because there are not enough resources to provide all of the goods and services that people want.
C)would not exist if all goods and services were scarce.
D)would not exist if government owned all of the resources.

Accepted Answer

The problem of determining what goods and services society should produce exists because there are not enough resources to provide all of the goods and services that people want. This is known as the economic problem of scarcity. If there were unlimited resources, there would be no need to make choices about what to produce. However, since resources are limited, societies must decide what to produce, how to produce it, and for whom to produce it.

Question 10

Although freshwater is very abundant in most places,it is scarce because:
A)it has no alternative uses.
B)there is not enough of it to meet all needs.
C)it is a free good.
D)scarce goods in general are not all that costly.

Accepted Answer

While freshwater may be abundant in certain areas, there may not be enough to meet all the needs of the population in that area. This scarcity is what makes freshwater a valuable resource even though it is technically a renewable resource.

Question 11

When a chef prepares a dinner for a customer,which factor is physical capital?
A)the chef
B)the oven
C)the food ingredients
D)the chef's training and experience

Accepted Answer

Physical capital refers to the physical resources used in production, such as machinery, tools, buildings, and equipment. In this case, the oven is a physical resource used by the chef to cook the meal, making it physical capital. The chef, food ingredients, and chef's training and experience are not physical resources.

Question 12

The basic concern of microeconomics is to:
A)keep business firms from losing money.
B)prove that capitalism is better than socialism.
C)study the choices people make.
D)use unlimited resources to produce goods and services to satisfy limited wants.

Accepted Answer

Microeconomics is concerned with the choices people make regarding the allocation of resources and how those choices affect supply and demand in the market. It is about studying the behavior of individuals and firms in making decisions about how to use scarce resources to satisfy unlimited wants. The other options are not accurate descriptions of the basic concern of microeconomics.

Question 13

If resources are scarce,it means that they:
A)are insufficient to provide enough goods and services to satisfy all human material wants and needs.
B)have no opportunity cost.
C)are probably not valued by consumers.
D)have an unlimited supply.

Accepted Answer

Scarce resources refer to resources that are limited in supply and cannot fulfill all human wants and needs. Therefore, A is the correct choice as it accurately defines the concept of scarce resources. B, C, and D are incorrect as they do not define the concept of scarce resources.

Question 14

The problem of scarcity is confronted by:
A)industrialized societies only.
B)preindustrial societies only.
C)societies governed by communist philosophies only.
D)all societies.

Accepted Answer

Scarcity is a universal problem that affects all societies, regardless of their level of development, economic system, or political philosophy. Scarcity exists because human wants and needs are unlimited while resources are finite, creating the need for individuals and societies to make choices and trade-offs about how to allocate scarce resources.

Question 15

How people choose among the alternatives available to them is:
A)not part of the study of economics.
B)impossible to describe.
C)the study of microeconomics.
D)not important in the study of microeconomics.

Accepted Answer

The study of microeconomics focuses on how individuals and firms make decisions to allocate limited resources, including how they choose among the various alternatives available to them.

Question 16

Which factor is NOT an example of a resource?
A)land
B)labor
C)capital
D)production

Accepted Answer

Production is not a resource, but rather the result of combining resources (land, labor, capital) to create goods or services.

Question 17

Scarcity in economics means that:
A)we often do not have sufficient resources to achieve our objectives.
B)the wants of people are limited.
C)there must be poor people in rich countries.
D)shortages exist in nearly all markets.

Accepted Answer

Scarcity in economics means that there are limited resources compared to unlimited wants and needs. This implies that it is not possible to satisfy all the desires of people with the resources that are available. Therefore, we often face a situation where we do not have sufficient resources to achieve all our objectives, which creates the need to make choices and prioritize our needs.

Question 18

We are forced to make choices because of:
A)exploitation.
B)efficiency.
C)scarcity.
D)the margin.

Accepted Answer

Scarcity is the fundamental economic problem that arises when there are limited resources and unlimited wants. Because of scarcity, individuals and societies are forced to make choices about how to allocate resources to satisfy their most pressing needs and wants. Therefore, the best choice is to prioritize and allocate resources efficiently to maximize benefits and minimize costs.

Question 19

We have to make choices because:
A)we have unlimited income.
B)resources are scarce.
C)resources are infinite.
D)with good planning,trade-offs can be avoided.

Accepted Answer

Resources are scarce, so we must make choices on how to allocate them. If resources were infinite, then we wouldn't have to make choices, but in reality, we have to prioritize how we use our limited resources. Having unlimited income doesn't necessarily solve the problem of scarcity, as there are still limits to how much we can produce and consume. And while good planning can help minimize trade-offs, there will still be unavoidable choices to make.

Question 20

A resource is anything that:
A)can be used in production.
B)you pay for.
C)is in scarce supply.
D)can be consumed.

Accepted Answer

A resource is defined as anything that can be used in production. This includes both natural resources (such as coal, oil, and timber) and human resources (such as labor and entrepreneurship). The key characteristic of a resource is that it is used to create goods or services that are valuable to individuals and society as a whole. Resources can be produced (such as machinery and technology) or they can be found in nature, but in either case, they are valuable because they are necessary for production.

Quiz 1: First Principles

Freshwater is considered a scarce good because:

Manny is attending college and majoring in economics.By doing so,Manny is improving his:

When we are forced to make choices,we are facing the concept of:

A central and fundamental theme in economics is that:

Which resource is NOT one that pertains to the production of rice?

Scarcity exists when:

Which topic is studied in macroeconomics?

Which factor can BEST be considered to be a resource used in the production of computers?

The problem of determining what goods and services society should produce:

Although freshwater is very abundant in most places,it is scarce because:

When a chef prepares a dinner for a customer,which factor is physical capital?

The basic concern of microeconomics is to:

If resources are scarce,it means that they:

The problem of scarcity is confronted by:

How people choose among the alternatives available to them is:

Which factor is NOT an example of a resource?

Scarcity in economics means that:

We are forced to make choices because of:

We have to make choices because:

A resource is anything that: