Review IM1

Economics is best defined as the study of

• how the government can stop the harm from unchecked self-interest

• how to run a business most profitably

• how society manages its scarce resources

• how to predict inflation, unemployment, andstock prices.

Your opportunity cost of going to a movie is

• the price of the ticket plus the cost of any soda you buy at the theater

• he price of the ticket.

• the total cash expenditure to go to the movie plus the value of your time.

• zero, as long as you enjoy the movie

Which of the following questions is not answered by the decisions that every society must make?

• What goods will be produced?

• What determines consumer preferences?

• Who will consume the goods?

• Who will produce the goods?

What you give up to obtain an item is called your

• opportunity cost.

• explicit cost.

• true cost.

• direct cost.

Which of the following concepts can not be illustrated by the production possibilities frontier?

• efficiency

• equity

• tradeoffs

• opportunity cost