Question 1

The study of how society decides what, how, and for whom to produce is the study of:

Accepted Answer

Economics is the social science that studies how individuals, governments, firms, and nations make choices on allocating scarce resources to satisfy their unlimited wants. It encompasses the decision-making processes regarding what goods and services to produce, how to produce them, and for whom they are produced.

Question 2

The question of how society's output is to be distributed among its citizens must be answered:

Accepted Answer

The question of how society's output is to be distributed among its citizens is a fundamental economic issue that must be addressed by all economies, regardless of their development status or economic system.

Question 3

All social systems face the problem of economic scarcity, and this problem arises primarily from the fact that:

Accepted Answer

Economic scarcity arises because human wants are unlimited, but the resources available to satisfy these wants are limited. This fundamental mismatch creates the problem of scarcity.

Question 4

The problem of scarcity is present in some form or another:

Accepted Answer

Scarcity is a fundamental economic problem facing all societies. It arises because resources are limited, while human wants are unlimited, necessitating choices about how to allocate resources efficiently. This issue is not exclusive to any specific economic system or level of industrialization.

Question 5

The provincial government of British Columbia has to decide whether to construct 10 hospitals without research facilities or 5 with such facilities. Among the three fundamental questions in economics, which one applies here?

Accepted Answer

This decision falls under "What to produce" because it involves choosing between two different types of goods: hospitals with or without research facilities.

Question 6

The Federal government has decided that more middle-class Canadians should benefit from the growth of the economy in the next 20 years. Among the three fundamental questions in economics, which one applies to this situation?

Accepted Answer

The question "For whom to produce?" directly relates to the distribution of economic benefits among different groups within the economy, in this case, aiming to ensure more middle-class Canadians benefit from economic growth.

Question 7

What is economics sometimes called?

Accepted Answer

Economics is often referred to as the science of choice because it studies how individuals, businesses, governments, and societies make choices about allocating resources to satisfy their wants and needs.

Question 8

All of the following statements, except one, are valid examples of the way economists use the term 'scarcity.' Which is the exception?

Accepted Answer

Scarcity, in economic terms, refers to the limited nature of society's resources, including money, time, and raw materials. It does not typically refer to a scarcity of ideas, as ideas are not considered a finite resource in the same way as economic or natural resources.

Question 9

Dynamic aspects of resource allocations help us to understand all of the following issues, except one. Which is the exception?

Accepted Answer

Dynamic aspects of resource allocations primarily focus on how resources are distributed and utilized over time, influencing economic growth, stagnation, and savings/investment levels. They do not directly explain the strength of governmental regulations, which are more influenced by political, legal, and social factors.

Question 10

One of the major challenges today is all of the following, except one. The exception is:

Accepted Answer

Climate change, global warming, and the emission of greenhouse gases are all interconnected issues that pose significant challenges today. Slow population growth rates, however, are not universally considered a major challenge in the same context and can vary significantly by region.

Question 11

Which of the following would not promote economic growth within a society?

Accepted Answer

C) More people looking for jobs than there are jobs available would not promote economic growth as it indicates unemployment or underemployment, which can lead to decreased consumer spending and lower overall economic productivity.

Question 12

Which of the following statements is correct for a society that emphasizes the production of capital goods over consumer goods?

Accepted Answer

All the statements are correct because focusing on capital goods production leads to future growth, necessitates current savings, and eventually allows for increased production of both capital and consumer goods.

Question 13

High-growth economies are characterized by two key patterns, which are:

Accepted Answer

High-growth economies are typically characterized by high saving and high investment. High saving rates provide the capital necessary for investment, and high investment rates drive economic growth by increasing productive capacity and fostering technological innovation.

Question 14

At the very least, Joe Average and Bill Gates are both identically limited by:

Accepted Answer

The one limitation that Joe Average and Bill Gates share equally is the 24 hours that comprise a day, as both individuals have the same amount of time in a day regardless of their wealth, knowledge, or living situation.

Question 15

The concept of scarcity applies equally to Bill Gates and a homeless person because:

Accepted Answer

Scarcity applies to everyone because time is a limited resource, and both Bill Gates and a homeless person have only 24 hours in a day to allocate among their various needs and wants.

Question 16

When economists say there is no such thing as a free lunch, they mean that:

Accepted Answer

This phrase means that every choice involves a trade-off, implying that even if something appears to be free, there is always a cost to someone, somewhere, whether it's time, resources, or opportunity cost.

Question 17

Class attendance today is nearly 100% but on most other days it is less. The likely explanation for this would be:

Accepted Answer

The opportunity cost of not attending class is higher when missing class would mean losing out on more valuable information or experiences than usual. This could be due to a special guest lecture, an important announcement, a review session before an exam, or any other event that makes attending class particularly beneficial on that day.

Question 18

Forest is a mountain man living in complete isolation in the Yukon. He is self-sufficient. through hunting, fishing, and farming. He has not been in the city to buy anything in five years. Therefore:

Accepted Answer

The scarcity problem applies to everyone, including Forest, because resources are limited, and choosing one activity (like hunting) over another (like fishing) involves opportunity costs, indicating that he must make choices based on the scarcity of his time and resources.

Question 19

Benny has one hour before bedtime and he can either watch TV or listen to his new Korn CD. He chooses to listen to the CD. The scarcity problem's influence on Benny is seen in:

Accepted Answer

The scarcity problem is illustrated by the limited resource, which in Benny's case is the fixed amount of time (one hour) before bed. This scarcity forces him to make a choice between two alternatives.

Question 20

The number of Canadian households with access to the Internet and those with broadband connections is growing rapidly. As an economist, one could predict that when a major purchase is being considered, families will:

Accepted Answer

The availability of the Internet and broadband connections reduces the cost and effort required to gather information, making it more likely that families will collect more information before making a major purchase. This is because the Internet provides easy access to a vast amount of information, reviews, and comparisons, making the research process more efficient and less costly in terms of both time and money.

Quiz 1: Introduction to Key Ideas