Question 1

Whenever a choice is made:

Accepted Answer

Opportunity cost refers to the value of the next best alternative that must be given up in order to pursue the chosen option. Therefore, whenever a choice is made, there is an opportunity cost associated with it.

Question 2

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

Accepted Answer

Most goods and services can be produced with different combinations of resources, such as different levels of labor, capital, and technology. Therefore, the problem exists of determining the most efficient and effective method of production, taking into account factors such as cost, quality, and environmental impact.

Question 3

Opportunity cost is:

Accepted Answer

Opportunity cost refers to the highest valued alternative that was not chosen. This means that the best choice is the one that has the highest value or benefit compared to the next best alternative that was not chosen. Understanding opportunity cost is important in making rational and informed decisions.

Question 4

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 choice to pass a one-cent sales tax increase to fund education addresses the economic question of "What goods and services should a society produce?" as it is a decision made by the community to allocate resources towards education rather than other goods they typically consume.

Question 5

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

Accepted Answer

The three fundamental economic questions of what to produce, how to produce, and for whom to produce exist because of scarcity. Scarcity means that resources are limited, while people's wants and needs are unlimited. Therefore, societies must make choices about how to allocate scarce resources among different uses. These choices involve deciding what goods and services to produce, how to produce them, and who gets to consume them.

Question 6

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

Accepted Answer

The question is specifically asking about the types and amounts of goods and services that will be produced. This relates to the production decisions made by the economy, such as what goods should be produced, how much of each should be produced, and what resources will be used in the production process. Choices A, B, and C deal with other aspects of economics such as distribution, determining tastes, and resource allocation.

Question 7

Whenever a choice is made:

Accepted Answer

The opportunity cost of a choice is defined as the highest-valued other choice that could have been made. Therefore, the best choice(s) would be the one(s) with the lowest opportunity cost.

Question 8

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

Accepted Answer

The problem of determining what goods and services society should produce exists because there are not enough resources to provide all the goods and services that people want to purchase. This is known as the problem of scarcity. If all goods and services were scarce, then there would be no problem of determining what to produce since everything would be in high demand. Similarly, government ownership of all resources would not eliminate the problem of scarcity and the need to prioritize production.

Question 9

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.

Question 10

The problem of determining for whom to produce exists because:

Accepted Answer

The problem of determining for whom to produce arises because of scarcity. A limited amount of resources and goods means that producing for one person or group often means not producing for another. This is the essence of the economic problem of allocation. Government regulations, taxes, and costs may affect the production and distribution of goods, but the fundamental problem is scarcity. Therefore, option B is the best choice.

Question 11

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 arises from the fact that resources are limited, or scarce. If resources were plentiful, there would be no need to make choices about what to produce, as everything could be produced. However, because resources are finite, society must prioritize and make trade-offs in its production decisions.

Question 12

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 everything comes with a cost. In economics, this is known as opportunity cost, which refers to the cost of the next best alternative that had to be foregone in order to pursue a certain action. This concept acknowledges that resources are scarce and must be used wisely, and any decision to use them in one way means losing the opportunity to use them in another way.

Question 13

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 refers to the process of identifying the most efficient and effective combination of resources to use for production. This involves assessing the availability and suitability of different resources and deciding which ones should be used to achieve the desired level of output. Factors such as cost, quality, and productivity are considered in this decision-making process. Therefore, option A, which refers to identifying the best combinations of resources, is the correct answer. Options B, C, and D are not relevant to this problem as they do not address the issue of production decisions.

Question 14

A free good is:

Accepted Answer

A free good is a good that has no opportunity cost, meaning it is available in abundance and does not require any resources to acquire it.

Question 15

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 shift to using aluminum and plastic instead of steel in car manufacturing was a response to the need for more fuel-efficient cars, addressing the economic question of "How should goods and services be produced?" to adapt to the higher petroleum prices.

Question 16

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 does not require any effort or resources to obtain. It is not scarce because it is available in unlimited quantities. Scarce goods, on the other hand, are limited in supply and require resources to produce or obtain. Therefore, a free good is different from a scarce good because it is not scarce.

Question 17

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

Accepted Answer

The process of producing goods involves combining resources such as labor, land, and capital in various ways to create outputs that can satisfy human wants and needs. Therefore, understanding how goods are produced involves understanding how resources are combined and utilized in the production process. This information can help in determining the types and quantities of goods and services produced. However, it does not necessarily determine who receives the goods or how tastes and preferences are determined.

Question 18

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 will they be produced, and for whom will they be produced. Choice A includes all three of these questions. Choice B includes the correct first and last questions but replaces the second question with "why," which is not considered a fundamental economic question. Choice C replaces the first two questions with "when" and "why," neither of which are fundamental economic questions. Choice D includes one fundamental question ("how") and two that are not fundamental ("when" and "how much").

Question 19

In the 1930s, the federal government established the social security system to provide a minimum level of income to elderly and disabled people.This primarily addressed the economic question of:

Accepted Answer

The establishment of the social security system addressed the economic question of "For whom shall the goods be produced?" by providing a minimum level of income to elderly and disabled people.

Question 20

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

Accepted Answer

The question of for whom goods and services should be produced is fundamentally about distribution - who gets access to what resources, how much of those resources, and in what way. Option A reflects this concern by explicitly addressing the issue of how to allocate the economic pie among different groups in society. Options B and C are less relevant to this question, as they are focused more on trade and production levels rather than distribution. Option D is related to social justice concerns, but may not be directly relevant to determining for whom goods and services should be produced.

Quiz 1: Economics: the Study of Choice

Whenever a choice is made:

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

Opportunity cost is:

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:

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

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

Whenever a choice is made:

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

An answer to the question "For whom" determines:

The problem of determining for whom to produce exists because:

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

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

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

A free good is:

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:

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

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

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

In the 1930s, the federal government established the social security system to provide a minimum level of income to elderly and disabled people.This primarily addressed the economic question of:

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