Question 1

A free good is:

Accepted Answer

A free good is a good that is available in abundance and does not have an opportunity cost. It is not scarce and therefore does not require any sacrifice or trade-off to obtain it.

Question 2

The problem of determining for whom to produce exists because:

Accepted Answer

The problem of determining for whom to produce arises because resources are scarce, and a decision to produce a good or service for one person or group means that resources cannot be used to produce the same good or service for another person or group. This is known as the "opportunity cost" of production. Government regulations, taxes on firms or consumers may influence how goods are produced or consumed, but they are not the primary reason for the problem of determining for whom to produce.

Question 3

A free good is different from a scarce good because it is:

Accepted Answer

A free good is a good that is available in abundance and not limited in supply, such as air, sunlight, or natural water sources. These goods do not have a price because they are not scarce. Scarce goods, on the other hand, are goods that are limited in supply and have a price.

Question 4

In the 1970s, the Organization of Petroleum Exporting Countries (OPEC) tripled the price of petroleum, causing automobile manufacturers to look for ways to produce more fuel-efficient cars by substituting aluminum and plastic for steel. This was primarily a response to the economic question of:

Accepted Answer

The decision to substitute aluminum and plastic for steel was a production question related to how goods should be produced in response to the significant increase in the price of petroleum.

Question 5

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

Accepted Answer

The problem of determining what goods and services society should produce arises because there are not enough resources to provide all the goods and services that people want to purchase. This is why choices and trade-offs have to be made regarding the allocation of limited resources. If resources were unlimited, there would be no need to decide what goods and services to produce, as everything could be produced without any constraints.

Question 6

Water is considered a scarce good rather than a free good because:

Accepted Answer

Water is considered a scarce good because it has alternative uses. It can be used for drinking, irrigation, industrial uses, etc. When resources have alternative uses, it means that there is a limited supply of the resource and it must be allocated among its various uses, making it scarce.

Question 7

The Case in Point on Canadian politics, voters faced a choice between:

Accepted Answer

Option A is unlikely as Labour parties in most countries usually advocate for lower corporate tax rates.
Option B is also unlikely because the Labour Party usually prioritizes environmental regulations over lower taxes.
Option D is incorrect because the New Democratic Party typically advocates for higher corporate tax rates and more government spending to reduce inequality.
Therefore, option C is the best choice as it accurately reflects the platform of the New Democratic Party advocating for higher corporate tax rates and less deficit reduction compared to the Conservatives' platform.

Question 8

The three fundamental economic questions of what, how, and for whom:

Accepted Answer

The three fundamental economic questions exist because of scarcity. Scarcity means that resources are limited and unable to meet all the needs and wants of individuals and society. As a result, economic systems must make choices about what goods and services to produce, how to produce them, and for whom they will be produced. These choices are based on the availability of resources and the demands of consumers, which creates the need for the three fundamental economic questions.

Question 9

Suppose that voters in your community pass a one-cent sales tax increase to fund education, knowing full well they will have to forgo other goods they typically consume. This primarily addresses the economic question of:

Accepted Answer

The question of what goods and services a society should produce is addressed by the decision to allocate funds to education through a sales tax increase, which may result in a reduction in the consumption of other goods. This decision reflects the prioritization of education as a societal need over other goods that could be consumed with the same funds.

Question 10

A(n) _______ does not pose the problem of scarcity; one use of the good is not an alternative to another use.

Accepted Answer

A free good is not limited in supply and does not pose a problem of scarcity, thus one use of the good does not require sacrificing another use.

Question 11

The problem of determining how goods and services should be produced exists because:

Accepted Answer

This is the correct answer as most goods can be produced with different combinations of resources. Therefore, the question of how goods and services should be produced arises to determine the most efficient and effective combination of resources to produce goods and services. Choices A, B, and C are not relevant to the problem.

Question 12

The answer to, "What goods are to be produced ?" deals with:

Accepted Answer

The question, "What goods are to be produced?" specifically pertains to determining the kinds and quantities of goods and services to be produced.

Question 13

An answer to the question "For whom" determines:

Accepted Answer

The answer to the question "For whom" determines who gets the goods and services produced. It is related to the distribution of goods and services among different individuals or groups in society. The other options, such as tastes and preferences, production methods, and types of goods produced, are all factors that influence the answer to the question "For whom", but they do not provide a direct answer to the question itself.

Question 14

An answer to the question "How are goods produced?" determines:

Accepted Answer

How goods are produced depends on how resources are combined in the production process. The way in which resources such as labor, capital, and natural resources are utilized determines the types and quantities of goods and services that are produced. Choices A and B are not directly related to how goods are produced.

Question 15

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

Accepted Answer

The problem of determining what goods and services society should produce exists because resources are scarce. If resources were abundant, there would be no need for society to prioritize and allocate them.

Question 16

The statement that "there is no such thing as a free lunch" means:

Accepted Answer

The statement "there is no such thing as a free lunch" means that any production, consumption or allocation of resources has an opportunity cost. Opportunity cost refers to the highest valued alternative that must be forgone in order to engage in the chosen activity. Therefore, any production requires the use of scarce resources, and thus the sacrifice of another alternative.

Question 17

One question that arises when determining for whom goods and services should be produced is:

Accepted Answer

When determining for whom goods and services should be produced, the question of who gets how much of the economic pie arises. This question addresses the issue of distribution of resources among individuals and groups in society, which is an essential consideration in any economic system. The other choices do not directly address this question and are therefore not the best answer.

Question 18

The Case in Point on the Canadian government suggests the opportunity cost of economic growth for Canada is:

Accepted Answer

The Case in Point on the Canadian government suggests that economic growth has come at the cost of environmental quality. This is evident from the report's findings that Canada's greenhouse gas emissions have increased despite its commitment to reduce them under the Paris Agreement. Therefore, the opportunity cost of economic growth for Canada is environmental quality.

Question 19

The problem of determining how goods and services should be produced is a problem of deciding:

Accepted Answer

The problem of determining how goods and services should be produced involves deciding on the most efficient combination of resources to be used in the production process. This includes determining which resources to use, how much of each resource to use, and in what combination to use them in order to produce goods and services at the lowest possible cost while maintaining quality. The other options (B, C, and D) are not directly related to this problem.

Question 20

The fundamental economic questions that every economic system must answer are:

Accepted Answer

The three fundamental economic questions that every economic system must answer are what goods and services will be produced, how they will be produced, and for whom they will be produced. These questions are answered differently in different economic systems, such as market economies, command economies, and mixed economies.

Quiz 1: Economics: the Study of Choice