Economics - Chapter 1

Which of the following would best complete a short definition of economics?

“Economics is the study of…”

• How money is circulated through the economy

• How nations trade goods and services in a global marketplace.

• How unlimited resources are allocated between scarce wants

• How scarce resources are allocated to satisfy unlimited wants

Scarcity means:

• Too much of something you wanted

• Not enough of something you wanted

• The exact amount of something you wanted.

• None of the above

Which one is an example of a good?

• Nurse

• Shoes

• Teacher

• Firefighter

Which is a want?

• Healthy food

• Clean air

• Ice cream

• Water

Which is a need?

• An i-phone

• A flat screen TV

• a name brand purse

• a shelter/living space

Who provides a service?

A

• teacher

• builder

• baker

• farmer

The definition of Scarcity is

• An unlimited amount of resources to meet limited wants and needs

• When people use time and energy to create events

• A limited amount of resources to meet unlimited wants and needs

• A city where individuals commit themselves to unlimited wants and needs

Which of the following best defines “Opportunity Cost”?

• It is the cost of producing those goods most desired by an economy

• It is the amount of one product that must be given up in order to produce another

• It is the cost of the input mix that will lead to the greatest rate of growth for a company

• It is the cost of labor used in the production process

The basic problem of all economies is essentially one of deciding how to make the best use of

• Unlimited resources to satisfy unlimited wants

• Limited resources to satisfy limited wants

• Unlimited resources to satisfy limited wants

• Limited resources to satisfy unlimited wants

Audrey makes $300 per day at her job, She decides to take an unpaid day off of work to go to a Concert. She pays $100 total for the ticket and taxi fare. What is the value of Audrey’s total ‘opportunity cost’ of attending the Concert?

• $100

• $300

• $200

• $400