Question

(14)Which of the following statements is true?

Scarcity exists in every society because of the:

(a)Finite wants and needs of people in a society

(b)Unlimited resources in a society

(c)(a) and (b) above

(d)None of the above                 

(15)Is it every possible that a student who does only two (2) activities in a day, namely, studies and works out at her local gym can simultaneously increase the time she allocates to studying and working out at her local gym?

(a)Yes

(b)No

(c)Sometimes

(d)Any of the above

(16)What would be the opportunity cost to the student in Q#15 above, if she allocates more time to study for her upcoming calculus exam assuming that she does the same two (2) activities indicated?

(a)She would have no opportunity cost for her decision

(b)The time she would have to sacrifice working out at the gym

(c)The time she would have to forgo studying for her calculus test

(d)(a) or (c) above

(17)The theoretical principle which states that an increase in the price of a resource causes a decrease in the quantity demanded of the resource and vice versa is a description of the:

(a)Law of Gravity

(b)Law of Demand

(c)Law of Supply

(d)Any of the above

                                

(18)The underlying assumption for the economic principle identified in Q#17 above to work is:

(a)That consumers incomes are changing

(b)That government policy is changing

(c)Ceteris Paribus                                                           

(d)Consumers’ preferences are changing

(19)The slope of the demand curve that conforms to the theoretical principle that is described in Q#2 above is:

(a)Vertical

(b)Horizontal

(c)Inverse

(d)None of the above

(20)Which of the following statements about a market for strawberries in which the demand curve is expressed as D=140-4P and the supply curve is expressed as S=60+6P is false?

(a)The demand and supply “curves” are expressed as linear equations

(b)The “demand curve” conforms to the law of demand

(c)Both “curves” intersect each other at a common point

(d)None of the above

(21)The equilibrium price and quantity of strawberries traded in the market referenced in Q#20 above are:

(a)P=$10, 10 crates

(b)P=$5, 110 crates

(c)P=$80, 10 crates

(d)None of the above

(22)Suppose you are told that the supply of organically grown corn is represented by the equation S=120 + 4P, the supply of corn is being modeled:

(a)Graphically

(b)Verbally

(c)Mathematically

(d)Any of the above

(23)Which of the following statements is true?

Economists believe that scarcity causes everyone to:

(a)Satisfy all the wants with limited resources

(b)Make choices in their use of resources

(c)Disguise their wants from their needs

(d)Create unlimited resources

Answer 1

14. Scarcity exists in every society because human wants are infinite but resources are limited. Resources can't ever be infinite and all those wants and needs of people can't be fulfilled.

Answer: option D

15. As resources are scarce, in this case the time the student allocates to studying and working out at local gym, the student can't simultaneously increase the time she allocates to both activities. If she spends more time studying, she'd have less time for gym and vice versa.

Answer: option B

16. If the student allocates more time to studying, then her opportunity cost will be the time she would have to sacrifice working out at gym.

Answer: option B

17. The law of demand states that there is an inverse relationship between price and Quantity demanded. If price of a good increases, quantity demanded will decrease and vice versa.

Answer: option B