Deck 1: What Is Economics

Question 1

When an economist talks of scarcity, the economist is referring to the

A) ability of society to employ all of its resources.
B) inability of society to satisfy all human wants because of limited resources.
C) ability of society to continually make technological breakthroughs and increase production.
D) ability of society to consume all that it produces.

Answer 1

B

Question 2

Scarcity is a situation in which

A) most people can get only bare necessities.
B) people can satisfy all their wants.
C) some people can get all they want and some cannot.
D) people cannot satisfy all their wants.

Answer 2

D

Question 3

Economics is best defined as the study of how people, businesses, governments, and societies

A) use their infinite resources.
B) choose abundance over scarcity.
C) make choices to cope with scarcity.
D) attain wealth.

Answer 3

C

Question 4

Scarcity exists because

A) of the inefficient choices we make.
B) poor people need more food and other goods.
C) our wants exceed the resources available to satisfy them.
D) society and people are greedy and wasteful.

Question 5

Economists point out that scarcity confronts

A) the rich but not the poor.
B) both the poor and the rich.
C) neither the poor nor the rich.
D) the poor but not the rich.

Question 6

All economic questions arise because

A) we want more than we can get.
B) production possibilities are unlimited.
C) people are greedy.
D) people are irrational.

Question 7

Scarcity is

A) when a child wants a $1.00 can of soda and two 50¢ packs of gum and has $2.00 in her pocket.
B) our inability to satisfy all our wants.
C) an economic problem only for poor people.
D) a situation that exists during economic recessions but not during economic booms.

Question 8

People must make choices because

A) there are many goods available.
B) of scarcity.
C) most people enjoy shopping.
D) None of the above answers is correct.

Question 9

The most fundamental economic problem is

A) scarcity.
B) security.
C) health.
D) the fact the United States buys more goods from foreigners than we sell to foreigners.

Question 10

Fundamental economic problems basically arise from

A) the fact that society has more than it needs.
B) the unequal distribution of income.
C) turmoil in the stock market.
D) our wants exceeding our scarce resources.

Question 11

An incentive

A) could be either a reward or a penalty.
B) could be a penalty but could not be a reward.
C) is the opposite of a tradeoff.
D) could be a reward but could not be a penalty.

Question 12

As an economic concept, scarcity applies to

A) neither time nor money.
B) money but not time.
C) time but not money.
D) both money and time.

Question 13

An inducement to take a particular action is called

A) the marginal benefit.
B) opportunity cost.
C) an incentive.
D) the marginal cost.

Question 14

Scarcity is experienced by

A) only the poor.
B) everyone.
C) only the wealthy.
D) only producers.

Question 15

All economic questions are about

A) what to produce.
B) how to cope with scarcity.
C) how to satisfy all our wants.
D) how to make money.

Question 16

Scarcity requires that people must

A) trade.
B) cooperate.
C) make choices.
D) compete.

Question 17

Scarcity arises from

A) exploration.
B) limited wants and limitless resources.
C) limited resources and limitless wants.
D) inefficient production.

Question 18

All economic questions arise because we

A) have an abundance of resources.
B) have limited wants that need to be satisfied.
C) want more than we can get.
D) want more than we need.

Question 19

Scarcity can be eliminated through

A) wise use of our resources.
B) the use of market mechanisms.
C) exploration that helps us find new resources.
D) None of the above because scarcity cannot be eliminated.

Question 20

Scarcity is common to all economic systems because resources are

A) unlimited due to constant technological advances.
B) unlimited and so are human desires and wants.
C) limited and so are human desires and wants.
D) limited, but human desires and wants are unlimited.

Question 21

The problem of "scarcity" applies

A) only in industrially developed countries because resources are scarce in these countries.
B) only in economic systems that are just beginning to develop because specialized resources are scarce.
C) only in underdeveloped countries because there are few productive resources in these countries.
D) to all economic systems, regardless of their level of development.

Question 22

One topic of study for a microeconomist would be the

A) effects of an increase in government spending on the nation's production.
B) effects an increase in the price of gasoline has on an individual.
C) factors that lead to inflation.
D) factors that affect aggregate unemployment.

Question 23

In part, microeconomics is concerned with the study of

A) national output of goods and services.
B) the Federal Reserve's policies.
C) the effect government regulation has on the price of a product.
D) unemployment and economic growth.

Question 24

Economics is best defined as the science of choice and how people cope with

A) differences in needs.
B) differences in wants.
C) different economic systems.
D) scarcity.

Question 25

The study of the decisions of individual units in the economy is known as

A) the study of incentives.
B) macroeconomics.
C) microeconomics.
D) ceteris paribus study.

Question 26

Which of the following is a macroeconomic topic?

A) the reasons for the rise in average prices
B) whether the army should buy more tanks or more rockets
C) the reasons for a rise in the price of orange juice
D) why plumbers earn more than janitors

Question 27

In every economic system, choices must be made because resources are _ and our wants are

A) limited; limited
B) unlimited; unlimited
C) unlimited; limited
D) limited; unlimited

Question 28

Which of the following is an example of a microeconomic decision?

A) a small shoe factory deciding how much leather to purchase for the next quarter's production need
B) an individual deciding how to allocate the time he or she has for work and leisure
C) a multinational company deciding where to relocate its world headquarter
D) All of the above answers are correct.

Question 29

Economics is best defined as

A) making choices with unlimited wants but facing a scarcity of resources.
B) how people make money and profits in the stock market.
C) making choices from an unlimited supply of goods and services.
D) controlling a budget for a household.

Question 30

Which term best describes the study of the decisions of people and businesses and the interaction of these decisions?

A) macroeconomics
B) marginal study
C) microeconomics
D) scarcity science

Question 31

In part, microeconomics is concerned with

A) changes in the economy's total output of goods and services over long periods of time.
B) the Federal Reserve's policy decisions.
C) how a business firm decides upon the amount it produces and the price it sets.
D) factors that explain changes in the unemployment rate over time.

Question 32

The study of the choices made by individuals is part of the definition of

A) normative economics.
B) macroeconomics.
C) microeconomics.
D) positive economics.

Question 33

The branch of economics that deals with the analysis of the whole economy is called

A) marginal analysis.
B) metroanalysis.
C) microeconomics.
D) macroeconomics.

Question 34

Which of the following best defines the subject of economics?

A) the study of choices that businesses make to maximize profit
B) the art of making money
C) the science that studies unemployment, inflation, and economic stability
D) the study of choices made to cope with scarcity

Question 35

The fundamental questions in economics result from

A) distribution of income.
B) an excess of production over the wants of society.
C) technological progress.
D) scarcity of resources relative to the wants of society.

Question 36

The study of economics

A) recognizes that scarcity does not affect rich nations.
B) focuses mainly on individual consumers.
C) arises from the fact that our wants exceed available resources.
D) deals mainly with microeconomics.

Question 37

Economics is the study of

A) the distribution of surplus goods to those in need.
B) ways to reduce wants to eliminate the problem of scarcity.
C) affluence in a morally bankrupt world.
D) the choices we make because of scarcity.

Question 38

Which of the following questions is a topic that would be studied by microeconomics?

A) How will a lower price of digital cameras affect the quantity of cameras sold?
B) What is the current unemployment rate in the United States?
C) Will the current budget deficit affect the well- being of the next generation?
D) Why did production and the number of jobs shrink in 2008?

Question 39

An example of a question that might be explored in microeconomics is to determine

A) savings by the household sector.
B) why the U.S. economy has grown more rapidly than the Japanese economy.
C) the total employment within the U.S. economy.
D) the number of workers employed by Intel.

Question 40

When a wealthy businessman is unable to buy tickets to the Super Bowl, he or she experiences
)

A) opportunity costs
B) scarcity
C) economics
D) the fallacy of composition

Question 41

Which of the following is a microeconomic topic?

A) How rent ceilings impact the supply of apartments.
B) How a tax rate increase will impact total production.
C) How a trade agreement between the United States and Mexico affects both nations' unemployment rates.
D) Comparing inflation rates across countries.

Question 42

The analysis of the behavior of individual decision- making units is the definition of

A) positive economics.
B) normative economics.
C) microeconomics.
D) macroeconomics.

Question 43

Which of the following is a microeconomic topic?

A) The effect of the government budget deficit on inflation.
B) The reasons why Kathy buys less orange juice.
C) The reasons why total employment decreases.
D) The reasons for a decline in average prices.

Question 44

Studying the effects choices have on the individual markets within the economy is part of

A) incentives.
B) macroeconomics.
C) scarcity.
D) microeconomics.

Question 45

Which of the following is a macroeconomic issue?

A) The hiring decisions that a business makes.
B) The effect of an increase in the tax on cigarettes on cigarette sales.
C) The purchasing decisions that an individual consumer makes.
D) The effect of increasing the money supply on inflation.

Question 46

Microeconomics is the study of .

A) the global economy
B) all aspects of scarcity
C) the choices that individuals and businesses make
D) the national economy

Question 47

Which of the following questions is NOT a microeconomic question?

A) What is Britney's opportunity cost of having another baby?
B) Does the United States have a comparative advantage in information technology services?
C) Can the Federal Reserve keep income growing by cutting interest rates?
D) How would a tax on e- commerce affect eBay?

Question 48

The fact that wants cannot be fully satisfied with available resources reflects the definition of

A) the big tradeoff.
B) the what tradeoff.
C) for whom to produce.
D) scarcity.

Question 49

In broad terms the difference between microeconomics and macroeconomics is that

A) microeconomics studies decisions of individual people and firms and macroeconomics studies the entire national economy.
B) they use different sets of tools and ideas.
C) microeconomics studies the effects of government taxes on the national unemployment rate.
D) macroeconomics studies the effects of government regulation and taxes on the price of individual goods and services whereas microeconomics does not.

Question 50

Which of the following is a macroeconomic issue?

A) What determines the amount a firm will produce.
B) How federal government budget deficits affect interest rates.
C) How a rise in the price of sugar affects the market for sodas.
D) The cause of a decline in the price of peanut butter.

Question 51

Macroeconomics differs from microeconomics in that:

A) macroeconomics studies the behavior of government while microeconomics looks at private corporations.
B) macroeconomics focuses on the national economy and the global economy.
C) macroeconomics studies the decisions of individuals.
D) microeconomics looks at the economy as a whole.

Question 52

Macroeconomics is the branch of economics that studies

A) the economy as a whole.
B) important, as opposed to trivial, issues.
C) prices of individual goods.
D) the way individual markets work.

Question 53

Which of the following questions is a macroeconomic issue?

A) What is the future growth prospect for an economy?
B) What effect would a cure for Mad Cow Disease have on the market for beef?
C) How many more pounds of cookies will a consumer purchase if the price of cookies decreases?
D) How many workers should the owner of a business hire?

Question 54

Microeconomics focuses on all of the following EXCEPT the

A) effect on inflation of increasing the money supply.
B) hiring decisions made by a business.
C) effect on cigarette sales of an increase in the tax on cigarettes.
D) purchasing decisions made by an individual consumer.

Question 55

Scarcity is a situation in which .

A) some people are poor and others are rich
B) long lines form at gas stations
C) we are unable to satisfy all our wants
D) something is being wasted

Question 56

Which of the following is a macroeconomic decision or concept?

A) how many television sets to produce
B) the unemployment rate for each firm
C) the price of oil
D) the unemployment rate for the entire economy

Question 57

Macroeconomics is concerned with

A) economy- wide variables.
B) government decision making concerning farm price supports.
C) individual consumers.
D) the effects on Ford Motor of a strike by the United Auto Workers.

Question 58

Macroeconomic topics include

A) studying what factors influence the price and quantity of automobiles.
B) total, nationwide employment.
C) the impact of government regulation of markets.
D) studying the determination of wages and production costs in the software industry.

Question 59

Economics can be defined as the social science that explains the .

A) choices made by households
B) choices we make when we trade in markets
C) choices that we make as we cope with scarcity
D) choices made by politicians

Question 60

Studying the determination of prices in individual markets is primarily a concern of

A) microeconomics.
B) macroeconomics.
C) negative economics.
D) positive economics.

Question 61

When a farmer decides to raise hogs instead of cattle, the farmer is answering the _ _ question.

A) "for whom"
B) "why"
C) "what"
D) "how"

Question 62

When a country decides to produce fewer bombers and more public housing projects, it is answering the question.

A) "for whom"
B) "what"
C) "how"
D) "defense"

Question 63

When a farmer decides to grow sugar cane instead of radishes, the farmer is answering the
Question.

A) "for whom"
B) "when"
C) "why"
D) "what"

Question 64

U.S. producers decide to produce more compact cars and fewer SUVs as the price of gasoline rises. Producers are answering the question.

A) "how"
B) "what"
C) "how many"
D) "when"

Question 65

The largest part of what the United States produces today is _ such as .

A) goods; education and entertainment
B) services; textbooks and computers
C) goods; food and electronic equipment
D) services; trade and health care

Question 66

When an economy produces more houses and fewer typewriters, it is answering the question.

A) "where"
B) "how"
C) "for whom"
D) "what"

Question 67

The question "Should CDs or DVDs be produced?" is an example of the

A) "for whom" question.
B) "what" question.
C) "where" question.
D) "how" question.

Question 68

all the objects that we value and are willing to pay for.

A) Capital is
B) Wants are
C) Resources are
D) Goods and services are

Question 69

Which of the following statements is correct?

A) The United States produces an equal amount of goods and services.
B) The United States produces more goods than services.
C) The United States produces more services than goods.
D) The percentage of people producing goods in the United States has steadily increased over the last 60 years.

Question 70

If Taco Bell decides to produce more tacos and fewer burritos, Taco Bell is answering the question.

A) "scarcity"
B) "why"
C) "when"
D) "what"

Question 71

When a textile firm decides to produce more cotton fabric and less synthetic fabric, it is most directly answering the question.

A) "how"
B) "what"
C) "why"
D) "for whom"

Question 72

Over the last 60 years, as a proportion of total production, the U.S. economy has produced more

A) agricultural products.
B) goods.
C) services.
D) goods and services.

Question 73

When China builds a dam using few machines and a great deal of labor, it is answering the
Question.

A) "how"
B) "what"
C) "where"
D) "for whom"

Question 74

In the U.S. economy, a recent trend has been that

A) employment in both agriculture and the service industry has been decreasing.
B) employment in agriculture has been increasing.
C) employment in mining, construction, and manufacturing has been increasing.
D) employment in the service industry has been increasing.

Question 75

When a textile company keeps track of its inventory using a computer and its competitor uses a spreadsheet and pencil, they are both answering the question.

A) "how"
B) "where"
C) "for whom"
D) "what"

Question 76

^In the United States, the percentage of people employed in over the last 60 years.

A) farming has increased
B) manufacturing has increased
C) services has decreased
D) construction has increased

Question 77

When firms in an economy start producing more computers and fewer televisions, they are answering the question.

A) "where"
B) "for whom"
C) "what"
D) "when"

Question 78

Whether a company produces fishing rods mostly by hand or using high- tech machinery is a question of

A) why will the goods be produced.
B) how will the goods be produced.
C) for whom will goods be produced.
D) where will the goods be produced.

Question 79

When a firm decides to produce more electric cars and fewer gas guzzlers, it is most directly answering the question.

A) "what"
B) "how"
C) "for whom"
D) "scarcity"

Question 80

In the U.S. economy, which of the following statements is true?

A) The economy is too complex to determine the proportion of production that is devoted to producing services.
B) More goods are produced than services.
C) More services are produced than goods.
D) Production is divided evenly between goods and services.