intro to Economics

The characteristic from which all economic

problems arise is

• political decisions.

• scarcity.

• how to make a profit.

• hunger.

Jamie has enough money to buy either a

Mountain Dew, or a Pepsi, or a bag of chips.

He chooses to buy the Mountain Dew. The

opportunity cost of the Mountain Dew is

• the Pepsi and the bag of chips.

• the Pepsi or the bag of chips, whichever

  the best alternative given up.

• the Mountain Dew.

• the Pepsi because it is a drink, as is the

  Mountain Dew.

If the marginal benefit of the next slice of

pizza exceeds the marginal cost, you will

• eat the slice of pizza.

• not eat the slice of pizza.

• be unable to choose between eating or not

  eating.

• eat half the slice.

When people make rational choices, they

• behave selfishly.

• do not consider their emotions.

• weigh the costs and benefits of their op-

  tions and act to satisfy their wants.

• necessarily make a decision in the social

  interest.

A positive statement...

• cannot be negative.

• cannot be tested.

• can be tested against the facts.

• depends on someone’s value judgment.

"Everyone should make saving the environment their number one priority", is an example of a ...

• opportunity cost

• trade offs

• Normative statments

• Positive statments

All resources are scarce.

• True

• False

Society has unlimited wants and limited resources.

• True

• False

Due to scarcity, choices must be made.

• True

• False

Every choice has a cost.

• True

• False