Question 1

Ex-London School of Economics student Mick Jagger sang, "You can't always get what you want, but if you try sometime, you just might find you can get what you need." Another statement of the basic economic principle expressed in this lyric is that

Accepted Answer

A)  rational decisions are not always possible.
B)  you can allocate your resources to what gives you the highest value.
C)  you can create the supply to meet your own demand.
D)  you can maximize social welfare by making optimal decisions.

Question 2

Which of the following is not an example of a type of factor of production?

Accepted Answer

A)  land 
B)  labor 
C)  government 
D)  capital

Question 3

A rational decision is one that

Accepted Answer

A)  satisfies all desires.
B)  avoids the intentional allocation of resources.
C)  assigns available resources in the manner most preferred by decision makers.
D)  assigns available resources to the uses with the lowest opportunity costs.

Question 4

If the economy of Gwondanaland is growing more rapidly than the economy of Japan, most likely

Accepted Answer

A)  Japan has more current investment than Gwondanaland.
B)  Japan has more government spending than Gwondanaland.
C)  Japan spends more on capital goods than Gwondanaland.
D)  Gwondanaland has lower current consumption than Japan.
E)  Gwondanaland has lower current investment than Japan.

Question 5

Since it is a centrally planned economy, China does not face opportunity costs when economic decisions are made.

Accepted Answer

A) True 
 B)False

Question 6

Rational production decisions require an understanding of

Accepted Answer

A)  trade-offs.
B)  opportunity costs.
C)  scarcity of resources.
D)  All of the above are correct.

Question 7

Probably the most important source of efficiency in production is

Accepted Answer

A)  investing in more capital goods.
B)  consuming rationally.
C)  expanding the production possibilities frontier.
D)  increasing inputs of energy and raw materials.
E)  the specialization of labor.

Question 8

Waiting in line to get a free ticket does not involve any opportunity cost.

Accepted Answer

A) True 
 B)False

Question 9

List the three coordination decisions made by every economy.

Accepted Answer

A)  Where? When? How? 
B)  How? What? To whom? 
C)  Why? Where? What? 
D)  When? To Whom? Where?

Question 10

What determines the position and shape of a society's production possibilities frontier?

Accepted Answer

A)  the physical resources of that society 
B)  the skills of the workforce 
C)  the level of technology of the society 
D)  the amount of factories in the society 
E)  All of the above are correct.

Question 11

Inputs in production processes are called resources.

Accepted Answer

A) True 
 B)False

Question 12

The scarcity of physical resources such as fuel means:

Accepted Answer

A)  we should keep our homes cooler in the winter 
B)  we should keep our homes warmer in the summer 
C)  we should live close to our jobs to conserve fuel 
D)  all of these are true.

Question 13

Voluntary exchange

Accepted Answer

A)  is usually beneficial to one party, but not the other.
B)  is always beneficial to both parties.
C)  is occasionally beneficial to both parties.
D)  occurs only between nations, not between individuals.

Question 14

What mechanism assures that producers use inputs efficiently?

Accepted Answer

A)  governmental regulations on use of resources 
B)  altruism 
C)  the desire for profit 
D)  an innate desire to be efficient 
E)  All of the above are correct.

Question 15

If a farmer's opportunity cost of producing 50,000 bushels of wheat is 20,000 fewer bushels of soybeans, then her opportunity cost of producing 50,000 bushels of soybeans must also be 20,000 fewer bushels of wheat.

Accepted Answer

A) True 
 B)False

Question 16

What is the basic task that economists expect the market to carry out?

Accepted Answer

A)  deal with the fundamental problem of scarcity 
B)  balance the government's budget 
C)  lessen wants to the level of income available 
D)  meet all human wants

Question 17

Economic growth solves the problem of scarcity.

Accepted Answer

A) True 
 B)False

Question 18

Because of scarcity, every economic decision involves

Accepted Answer

A)  a trade-off.
B)  a free good.
C)  a trade-in.
D)  an increasing cost.
E)  a money payment.

Question 19

In a market economy, the decision regarding allocation of resources is made by

Accepted Answer

A)  automatic forces of supply and demand.
B)  authorities in Washington, D.C.
C)  planners in state capitals.
D)  committees from a variety of economic interest groups.
E)  All of the above are correct.

Question 20

Few bother to think about what makes Florida oranges show up daily in South Dakota supermarkets, but the people of South Dakota are likely to think a great deal about this.Why does someone take the time and energy to assure that oranges which are grown in Florida move more than 1,000 miles before they appear on grocery shelves?

Accepted Answer

In a market economy, there is profit to ...

Exam 3: The Fundamental Economic Problem: Scarcity and Choice

Inputs in production processes are called resources.

Correct Answer
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Correct Answer
verified
In a market economy, there is profit to ...
View Answer

If a farmer's opportunity cost of producing 50,000 bushels of wheat is 20,000 fewer bushels of soybeans, then her opportunity cost of producing 50,000 bushels of soybeans must also be 20,000 fewer bushels of wheat.

Correct Answer
verified

Probably the most important source of efficiency in production is

Correct Answer
verified

Rational production decisions require an understanding of

Correct Answer
verified

What mechanism assures that producers use inputs efficiently?

Correct Answer
verified

Ex-London School of Economics student Mick Jagger sang, "You can't always get what you want, but if you try sometime, you just might find you can get what you need." Another statement of the basic economic principle expressed in this lyric is that

Correct Answer
verified

Which of the following is not an example of a type of factor of production?

Correct Answer
verified

What determines the position and shape of a society's production possibilities frontier?

Correct Answer
verified

List the three coordination decisions made by every economy.

Correct Answer
verified

Because of scarcity, every economic decision involves

Correct Answer
verified

A rational decision is one that

Correct Answer
verified

If the economy of Gwondanaland is growing more rapidly than the economy of Japan, most likely

Correct Answer
verified

Economic growth solves the problem of scarcity.

Correct Answer
verified

In a market economy, the decision regarding allocation of resources is made by

Correct Answer
verified

The scarcity of physical resources such as fuel means:

Correct Answer
verified

Waiting in line to get a free ticket does not involve any opportunity cost.

Correct Answer
verified

Since it is a centrally planned economy, China does not face opportunity costs when economic decisions are made.

Correct Answer
verified

What is the basic task that economists expect the market to carry out?

Correct Answer
verified

Voluntary exchange

Correct Answer
verified

Exam 3: The Fundamental Economic Problem: Scarcity and Choice

Inputs in production processes are called resources.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedIn a market economy, there is profit to ...View AnswerShow Answer

If a farmer's opportunity cost of producing 50,000 bushels of wheat is 20,000 fewer bushels of soybeans, then her opportunity cost of producing 50,000 bushels of soybeans must also be 20,000 fewer bushels of wheat.

Correct AnswerverifiedShow Answer

Probably the most important source of efficiency in production is

Correct AnswerverifiedShow Answer

Rational production decisions require an understanding of

Correct AnswerverifiedShow Answer

What mechanism assures that producers use inputs efficiently?

Correct AnswerverifiedShow Answer

Ex-London School of Economics student Mick Jagger sang, "You can't always get what you want, but if you try sometime, you just might find you can get what you need." Another statement of the basic economic principle expressed in this lyric is that

Correct AnswerverifiedShow Answer

Which of the following is not an example of a type of factor of production?

Correct AnswerverifiedShow Answer

What determines the position and shape of a society's production possibilities frontier?

Correct AnswerverifiedShow Answer

List the three coordination decisions made by every economy.

Correct AnswerverifiedShow Answer

Because of scarcity, every economic decision involves

Correct AnswerverifiedShow Answer

A rational decision is one that

Correct AnswerverifiedShow Answer

If the economy of Gwondanaland is growing more rapidly than the economy of Japan, most likely

Correct AnswerverifiedShow Answer

Economic growth solves the problem of scarcity.

Correct AnswerverifiedShow Answer

In a market economy, the decision regarding allocation of resources is made by

Correct AnswerverifiedShow Answer

The scarcity of physical resources such as fuel means:

Correct AnswerverifiedShow Answer

Waiting in line to get a free ticket does not involve any opportunity cost.

Correct AnswerverifiedShow Answer

Since it is a centrally planned economy, China does not face opportunity costs when economic decisions are made.

Correct AnswerverifiedShow Answer

What is the basic task that economists expect the market to carry out?

Correct AnswerverifiedShow Answer

Voluntary exchange

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
verified
In a market economy, there is profit to ...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
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Correct Answer
verified

Correct Answer
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Correct Answer
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