Economics - Chapter 1 What is Economics

According to the text, economics is

• the principles describing how people, businesses, and governments out to make financial choices.

• the science of how and why people, businesses, and governments make the choices they do.

• the description of systems man creates in order to produce, buy, and sell goods and services.

• the study of theories that guide nations' financial and monetary laws and systems.

Which of the following examples falls into the sphere of economics?

• the rise and fall of the stock market.

• a mother's trip to the supermarket

• a university class on business management

• all of the above

Which two basic economic principles create the need for choices?

• scarcity and contentment

• utility and opportunity

• insatiability and scarcity

• subjective value and utility

What biblical concept refers to a person's responsibility to make proper choices with his resources?

• utility

• stewardship

• contentment

• public good

After twelve years of faithful service, your family's car finally collapses beyond hope of repair and must be taken to the junkyard. Which economic term does this vehicle now best illustrate?

• a free good

• a nuisance good

• an economic good

• a scarce good

The economic cost of a good or service is

• the price charged for it

• the cumulative cost of making and marketing it.

• the regret a consumer feels after choosing it

• the value people place on it

A family must quickly leave it home due to a fire. On her way out the door, the mother grabs the family photo albums but leaves several expensive paintings behind. What economic concept do her actions best illustrate?

• intrinsic value

• utility

• insatiability

• subjective value

Conservation of natural resources primarily shows a grasp of which economic concept?

• scarcity

• public good

• utility

• microeconomics

Suppose you have $20. You will receive 6 utils if you spend the money on a new shirt and 10 utils if you purchase a new album. What will your net utility be if you finally decide to buy an album?

• 10 utils

• 6 utils

• 4 utils

• -4 utils

Your family decides to take a trip to Europe this summer instead of next because airline rate are currently low. What economic concept do the lower airline rates illustrate in your family's decision making process?

• opportunity cost

• opportunity benefit

• hidden cost

• intrinsic value