Deck 1: Whats in Economics for You Scarcity, Opportunity Cost, Trade, and Models

Question 1

A government that has a budget surplus does not face the problem of scarcity.

Answer 1

False

Question 2

The inability to satisfy all of our wants is called the problem of

A) opportunity cost.
B) scarcity.
C) incentives.
D) marginal cost.
E) comparative advantage.

Answer 2

scarcity.

Question 3

Which of the following limits our ability to get everything we want?

A) capitalism
B) scarcity
C) socialism
D) democracy
E) money

Answer 3

money

Question 4

The main implication of scarcity in economics is that people must be selfish.

Question 5

The main implication of scarcity in economics is that people must make choices.

Question 6

If you could be immortal and infinitely rich, you would not face the problem of scarcity.

Question 7

The textbook title - Economics for Life - comes from a quote by George Bernard Shaw.

Question 8

Some social activists believe that scarcity occurs because we always want more. This idea is called

A) activism.
B) paternalism.
C) monetarism.
D) materialism.
E) socialism.

Question 9

Economics is about

A) how individuals make the best possible choices.
B) how businesses make the best possible choices.
C) how governments make the best possible choices.
D) how choices interact in markets.
E) all of the above.

Question 10

The problem of scarcity exists

A) only in economies without incentives.
B) only in economies with incentives.
C) in all economies.
D) only when people are unemployed.
E) now but will be eliminated with economic growth.

Question 11

The National Ballet of Canada does not face a problem of scarcity.

Question 12

Which of the following limits our ability to get everything we want?

A) scarcity
B) specialization
C) socialism
D) socialization
E) time

Question 13

Scarcity is not a problem for a wealthy professional athlete like Tiger Woods.

Question 14

Economics is about

A) making money.
B) greed.
C) making choices because of scarcity.
D) overcoming scarcity.
E) overcoming greed.

Question 15

The textbook title - Economics for Life - comes from the quote "Economy is the art of making the most of life."

Question 16

Economics is about overcoming scarcity.

Question 17

In a world of scarcity,

A) all products are free.
B) opportunity cost is zero.
C) you are not limited by time.
D) you do not need to work.
E) you must make choices among alternatives.

Question 18

Economics is about overcoming greed.

Question 19

Scarcity arises because we all have limited money, time, and energy.

Question 20

There are some people and organizations who do not face the problem of scarcity.

Question 21

Gina missed her shift at the restaurant in order to attend a soccer game. She paid $30 for the ticket, $20 for parking, and ate $10 worth of popcorn. Had she worked her shift, Gina would have earned $100. Her opportunity cost of attending the game is

A) $60.
B) $150.
C) $160.
D) $0.
E) $100.

Question 22

Because of scarcity, we must give up some of one product in order to get more of another. This is the concept of

A) specialization.
B) implicit cost.
C) comparative advantage.
D) opportunity cost.
E) absolute advantage

Question 23

Which of the following sayings best describes opportunity cost?

A) "Make hay while the sun shines."
B) "Love of money is the root of all evil."
C) "Boldly go where no one has gone before."
D) "There's no such thing as a free lunch."
E) "Baseball has been very good to me."

Question 24

Lydia is deciding whether to study for her economics test or her accounting test. If she chooses to study accounting, her opportunity cost is

A) studying economics.
B) less than the value of studying economics.
C) not comparable to the value of studying economics.
D) equal to the value of studying economics.
E) the lost future wages if she fails her accounting test.

Question 25

Markets overcome the problem of scarcity.

Question 26

Last week Santiago found a new pair of red Nike Air Soles in the parking lot. He had just paid $120 to buy a pair of blue Nike Air Soles a few days earlier. A friend offers $80 to buy the pair of red Air Soles. Santiago says no and decides to keep both pairs for himself. The opportunity cost of this decision is

A) $80.
B) $120.
C) $40.
D) $0.
E) $200.

Question 27

Voluntary trade solves the problem of scarcity.

Question 28

Charu can earn $200 an hour playing online poker. If she spends an hour in the backyard, she can rake up 2 bags of leaves. Her opportunity cost of playing online poker is measured in units of

A) bags per rake.
B) rakes per dollar.
C) dollars per bag.
D) hours per hour.
E) bags per hour.

Question 29

Opportunity cost measures the cost of

A) the top two alternatives.
B) the worst case scenario.
C) the best alternative given up.
D) all alternatives given up.
E) the top ten alternatives.

Question 30

Gina missed her shift at the restaurant in order to attend a soccer game. She paid $30 for the ticket, $20 for parking, and ate $10 worth of popcorn. Had she worked her shift, Gina would have earned $100. Her money cost of attending the game is

A) $60.
B) $150.
C) $160.
D) $0.
E) $100.

Question 31

When the government of New Brunswick chooses to use inputs to build a dam, those inputs are no longer available to build a highway. This illustrates the concept of

A) a market.
B) macroeconomics.
C) opportunity cost.
D) incentives.
E) gains from trade.

Question 32

If we all wanted less, instead of always wanting more, this would solve the problem of scarcity.

Question 33

John gave Margaret a $20,000 painting for her birthday. Last week, an art dealer offered to buy the painting from Margaret for $25,000. Margaret said no. The opportunity cost of her decision is

A) $5,000.
B) $45,000.
C) $0.
D) $20,000.
E) $25,000.

Question 34

Mario divides his time between fishing and farming. In one day he can catch 20 kilograms of fish or harvest 10 bushels of potatoes. Mario's opportunity cost of farming is

A) 1/2 bushel potatoes per kilogram of fish.
B) 1/2 kilogram fish per bushel of potatoes.
C) 2 bushels potatoes per kilogram of fish.
D) 2 potatoes per fish.
E) 2 kilograms fish per bushel of potatoes.

Question 35

Scarcity is a problem only for materialistic people.

Question 36

When the government of Manitoba chooses to build more roads, the required inputs are no longer available to build better health care facilities. This illustrates the concept of

A) marginal benefit.
B) monetary cost.
C) opportunity cost.
D) incentives.
E) entrepreneurship.

Question 37

The main implication of scarcity in economics is that people must be unhappy.

Question 38

The opportunity cost of attending college

A) depends on your major.
B) depends on what you could earn now.
C) depends on what you expect to earn with your college degree.
D) must be greater than the money cost.
E) must be less than the money cost.

Question 39

Andrew decides to open a laboratory in his basement. He quits his job, sacrificing $30,000 a year; cashes in $200,000 of Canada Savings Bonds that were paying him an interest rate of 5 percent per year; and evicts a tenant who was paying $10,000 a year in rent to live in the basement. The opportunity cost of Andrew's decision is

A) $40,000.
B) $50,000.
C) $0.
D) $30,000.
E) $240,000.

Question 40

The value of the fork in the road not taken is called

A) marginal cost.
B) opportunity cost.
C) monetary cost.
D) fiduciary cost.
E) cutlery cost.

Question 41

Opportunity cost is always greater than money cost.

Question 42

Which statement(s) is/are true? 1 If unemployment decreases, the opportunity cost of attending college decreases.
2 If men generally earn more than women, the opportunity cost of not attending college is higher for men than for women.

A) 1 only
B) 2 only
C) 1 and 2
D) neither 1 nor 2
E) impossible to tell without more information

Question 43

Smart choices will not change when incentives change.

Question 44

Incentives work because these rewards and penalties change the costs and benefits of the choices you make.

Question 45

The true cost of any choice is the cost of the best alternative given up.

Question 46

There is no such thing as a free lunch.

Question 47

The true cost of any choice is the cost of all alternatives given up.

Question 48

Money cost includes opportunity cost.

Question 49

Germaine plans to attend college next year. Tuition costs $3,000, books cost $600, and residence fees cost $4,000. She currently earns $24,000 a year working at Chapters but would have to quit work. Germaine's opportunity cost of attending college is $24,000.

Question 50

The true cost of any choice is the money cost.

Question 51

To make a smart choice, the value of what you get must be greater than the value of what you give up.

Question 52

Germaine plans to attend college next year. Tuition costs $3,000, books cost $600, and residence fees cost $4,000. She currently earns $24,000 a year working at Chapters but would have to quit work. Germaine's opportunity cost of attending college is $7,600.

Question 53

Which statement(s) is/are true? 1 If unemployment decreases, the opportunity cost of attending college decreases.
2 If men generally earn more than women, the opportunity cost of attending college is higher for men than for women.

A) 1 only
B) 2 only
C) 1 and 2
D) neither 1 nor 2
E) impossible to tell without more information

Question 54

Opportunity cost is always less than money cost.

Question 55

Scarcity means every choices involves a trade-off.

Question 56

Germaine plans to attend college next year. Tuition costs $3,000, books cost $600, and residence fees cost $4,000. She currently earns $24,000 a year working at Chapters but would have to quit work. Germaine's opportunity cost of attending college is $31,600.

Question 57

Which statement(s) is/are true? 1 If unemployment increases, the opportunity cost of attending college decreases.
2 If men generally earn more than women, the opportunity cost of attending college is higher for men than for women.

A) 1 only
B) 2 only
C) 1 and 2
D) neither 1 nor 2
E) impossible to tell without more information

Question 58

Opportunity cost includes money cost.

Question 59

You should include the risk of getting a parking ticket in opportunity cost when making a smart choice between parking illegally and buying a parking permit.

Question 60

Which statement(s) is/are true? 1 If unemployment increases, the opportunity cost of attending college decreases.
2 If men generally earn more than women, the opportunity cost of not attending college is higher for men than for women.

A) 1 only
B) 2 only
C) 1 and 2
D) neither 1 nor 2
E) impossible to tell without more information

Question 61

Tova and Ron are the only two people on the planet Melmac. It takes Tova 1 hour to produce a widget and 2 hours to produce a woggle.
It takes Ron 3 hours to produce a widget and 3 hours to produce a woggle.
Based on the information above, Tova and Ron

A) can both gain from trade if Tova specializes in producing widgets and Ron specializes in producing woggles.
B) can both gain from trade if Tova specializes in producing woggles and Ron specializes in producing widgets.
C) cannot both gain from trade because Tova has an absolute advantage in producing widgets and woggles.
D) can trade, but only Tova will gain.
E) can trade, but only Ron will gain.

Question 62

It takes Mom 30 minutes to cook dinner. In the same time, she can iron 6 shirts. Dad takes an hour to cook dinner and 30 minutes to iron a single shirt.

A) Mom should cook dinner; even though the opportunity cost is 12 shirts.
B) there are no gains from trade.
C) Dad has an absolute advantage in cooking dinner.
D) Dad has an absolute advantage in ironing shirts.
E) Mom shouldn't cook dinner; her opportunity cost is 6 shirts.

Question 63

In two hours of work, Clinton can catch 4 fish or he can pick 5 pints of berries. In two hours, Dong can catch 6 fish or she can pick 9 pints of berries. Which statement is true?

A) Clinton has a comparative advantage in catching fish.
B) Clinton has an absolute advantage in picking berries.
C) Clinton has an absolute advantage in catching fish.
D) Clinton has a comparative advantage in picking berries.
E) Clinton will lose if he trades.

Question 64

When you have no alternatives, the opportunity cost is zero.

Question 65

The opportunity cost of going to college or university is the same for men and women.

Question 66

In one hour, Chloe can bake 24 cookies or 12 blueberry muffins; Zabeen can bake 6 cookies or 2 blueberry muffins. For mutually beneficial trade, Chloe should

A) bake muffins because she has a comparative advantage.
B) give up. Mutually beneficial trade is impossible in this situation.
C) bake cookies because she has an absolute advantage.
D) bake cookies because she has a comparative advantage.
E) bake muffins because she has an absolute advantage.

Question 67

Women who do not go to college or university give up a bigger income gain than men who do not go.

Question 68

Canada has an absolute advantage in situations where

A) we can produce the product on weekends.
B) we consume less of this product than do people in other countries.
C) we consume more of this product than do people in other countries.
D) our opportunity cost of production is very high.
E) we can produce at lower cost than producers in other countries.

Question 69

Mutually beneficial trade is also called

A) a zero-sum game.
B) self-sufficiency.
C) international subsidization.
D) voluntary trade.
E) involuntary trade.

Question 70

It takes Mom 30 minutes to cook dinner. In the same time, she can iron 6 shirts. Dad takes an hour to cook dinner and 30 minutes to iron a single shirt.

A) Dad has an absolute advantage in ironing shirts.
B) Mom's opportunity cost of cooking dinner is ironing 6 shirts.
C) Mom has a comparative advantage in cooking dinner.
D) Dad's opportunity cost of cooking dinner is ironing half a shirt.
E) Dad's opportunity cost of cooking dinner is 6 shirts.

Question 71

In a zero-sum game

A) both players can lose.
B) the number of players is zero.
C) both players can win.
D) one player gains only when another player loses.
E) both players get zero gains.

Question 72

To encourage a child to do his chores, you should either increase the reward for doing, or increase the penalty for not doing the chores.

Question 73

In two hours of work, Clinton can catch 4 fish or he can pick 5 pints of berries. In two hours, Dong can catch 6 fish or she can pick 9 pints of berries. Which statement is true?

A) Clinton and Dong will trade and both persons will benefit.
B) Clinton and Dong will trade but only Dong will benefit.
C) Clinton and Dong will not trade.
D) Clinton and Dong will trade but only Clinton will benefit.
E) Clinton and Dong will both lose if they trade.

Question 74

Mutual gains from voluntary trade require differences in

A) depreciation costs.
B) comparative advantage.
C) external costs.
D) implicit costs.
E) absolute advantage.

Question 75

It takes Mom 30 minutes to cook dinner. In the same time, she can iron 6 shirts. Dad takes an hour to cook dinner and 30 minutes to iron a single shirt.

A) Dad has an absolute advantage in cooking.
B) Mom should cook dinner and iron; trade is impossible.
C) Dad has an absolute advantage in ironing shirts.
D) Dad should cook dinner; the opportunity cost is only 2 shirts.
E) Dad should cook dinner; the opportunity cost is only 1 shirt.

Question 76

Mutual gains from voluntary trade require differences in

A) internal costs.
B) implicit costs.
C) opportunity costs.
D) import tariffs.
E) external costs.

Question 77

In one hour, Chloe can bake 24 cookies or 12 blueberry muffins; Zabeen can bake 6 cookies or 2 blueberry muffins. Which statement is true?

A) Zabeen's opportunity cost of a cookie is 2 muffins.
B) Zabeen's opportunity cost of a cookie is 6 muffins.
C) Chloe's opportunity cost of a muffin is 12 cookies.
D) Chloe's opportunity cost of a muffin is 2 cookies.
E) Zabeen's opportunity cost of a cookie is 4 muffins.

Question 78

Specialization eliminates

A) scarcity.
B) dependency.
C) self-sufficiency.
D) mutual benefits.
E) opportunity cost.

Question 79

If Canada specializes in the production of wine we can produce 10,000 bottles per month. If Canada specializes in the production of wheat we can produce 200,000 bushels per month. The opportunity cost of a bottle of wine in Canada is

A) 120,000 bottles of wine.
B) 20 bushels of wheat.
C) 200 bushels of wheat.
D) 2,500 bottles of wine.
E) 1/20 of a bushel of wheat.

Question 80

Mutually beneficial trade occurs if both persons

A) increase production of the product for which they have a comparative advantage.
B) decrease production of the product for which they have a lower opportunity cost.
C) increase production of the product for which they have a higher opportunity cost.
D) increase production of the product for which they have an absolute advantage.
E) increase consumption of the product for which they have a higher opportunity cost.