Question

1. Scarcity occurs when: a. people are selfish. b. human wants and needs exceed the resources that are available to meet those wants and needs. c. there is insufficient demand. d. economies are undeveloped, 2. Rational self-interest predicts that: a. people will alter their behavior in response to changing incentives and circumstances. incentives are unimportant in decision making. incentives do not alter behavior, d. the decision-making process is efficient. 3. Which of the following is an example of a microeconomic issue? a country's unemployment rate a country's inflation rate a country's trade deficit a decision by Boeing to open another plant consists of all actual and potential buyers and sellers of a particular resource or product. An economy b. A society A country A market 5. When individuals, firms, and policyinakers make decisions, these decisions often have both costs and benefits. This is an example of: scarcity. trade-ofls. equity. efficiency 6. What must be given up in order to acquire or do something else is known as: money. stocks and bonds. goals. opportunity cost. 7. Marginal analysis is: a. a method that is used to determine income tax brackets. b. a method that is seldom used by economists. the process of comparing the additional benefits of an activity with the additional costs. d. another way of explaining disposal income.

Answer 1

1. B

Explanation: Resources are scarce because wants are unlimited.

2. A

Explanation: Individuals respond to incentives.

3. D

Explanation: A decision at the firm level is a micro-economic issue.

4. D

Explanation: A market consists of all potential buyers and sellers of a resource or product.