Question

38. Which of the following is considered by econom a money b. ideas c. needs d. food e. physical resources ists to be the most fundamentally scarce? 39. How does scarcity affect the range of possible choices that decision makers face? a. It narrows the choice to a single option. b. It narrows the range of choices. c. It increases the possible methods for solving problems. d. It clarifies the choices by highlighting the best solutions e. It simplifies the choices and therefore widens the range 40. Ex-London School of Economics student Mick Jagger sang. "You can't always get what you want, but if you try sometime, you just might find you can get what you need." Another statement of the basic economic principle expressed in this lyric is that a. rational decisions are not always possible. b. you can allocate your resources to what gives you the highest value c. you can create the supply to meet your own demand. d. you can maximize social welfare by making optimal decisions. 41. The money cost of a good will approximate the opportunity cost if a. there are serious distortions in the market. b. the market functions well. c. there is much specialization in the market. d. nations are exploiting the law of comparative advantage. 42. Money costs and opportunity costs are concepts that are a. not related in any meaningful way b. used by tax accountants. c. related through relative prices of goods and services. d. used by economists to learn the most efficient level of output. 43. The production possibilities curve illustrates the basic principle that a. an economy's capacity to produce increases in proportion to its population. b. if all resources of an economy are in use, more of one good can be produced only if less of another is produced. c. an economy will automatically seek that output at which all of its resources are employed. d. no opportunity cost exists in production.

Answer 1

Ans:38 e. Physical resources

Reason: due to the scarcity of physical resources, the allocation of these resources is what concerns the main subject matter of the economists.

Ans:39 d. it clarifies the choices by highlighting the best solution.

Ans:40 b. you can allocate resources to what gives you the highest value.

Ans:41 d. there is much specialization in the market

Ans:42 c. related to relative prices of goods and services.

Ans:43 b. if all resources of the economy are in use, more of one good can be produced only if less of another is produced.