Question

1. Which of the following describes the reason why scarcity exists?

A. Governments make bad economic decisions.

B. The gap between the rich and the poor is too wide.

C. Wants exceed the resources available to satisfy them.

D. There is too much unemployment.

2. Which of the following defines economics? Economics is the social science that studies ________.

A. the best way of eliminating scarcity

B. the choices made to cope with scarcity, how incentives influence those

choices, and how the choices are coordinated

C. how money is created and used

D. the inevitable conflict between self­interest and the social interest

3. Of the three big questions, what, how, and for whom, which of the following is an example of a how question?

A. Why do doctors and lawyers earn high incomes?

B. Why don’t we produce more small cars and fewer gas guzzlers?

C. Why do we use machines rather than migrant workers to pick grapes?

D. Why do college football coaches earn more than professors?

4. Which of the following is not a key idea in the economic way of thinking?

A. People make rational choices by comparing costs and benefits.

B. Poor people are discriminated against and should be treated more fairly.

C. A rational choice is made at the margin.

D. Choices respond to incentives.

5. A rational choice is ________.

A. the best thing you must forgo to get something

B. what you are willing to forgo to get something

C. made by comparing marginal benefit and marginal cost

D. the best for society

6. Which of the following best illustrates your marginal benefit from studying?

A. The knowledge you gain from studying two hours a night for a month

B. The best things forgone by studying two hours a night for a month

C. What you are willing to give up to study for one additional hour

D. What you must give up to be able to study for one additional hour

7. The scientific method uses models to ________.

A. clarify normative disagreements

B. avoid the need to study real questions

C. replicate all the features of the real world

D. focus on those features of reality assumed relevant for understanding a

cause­and­effect relationship

8. Which of the following is a positive statement?

A. We should stop using corn to make ethanol because it is raising the cost of food.

B. You will get the most out of college life if you play a sport once a week.

C. CompetitionamongwirelessserviceprovidersacrossthebordersofCanada,

Mexico, and the United States has driven roaming rates down.

D. Bill Gates ought to spend more helping to eradicate malaria in Africa

Answer 1

1. Ans is C) wants exceed the resources available to satisfy them

2. Ans is B)  Economics is the social science that studies the choices made to cope with scarcity, how incentives influence those choices, and how the choices are coordinated

3. Ans is C) why do we use machines rather than migrant workers to pick grapes?

4. Ans is B) poor people are discriminated against and should be treated more fairly

5. Ans is C) A rational choice is made by comparing marginal benefit and marginal cost

6. Ans is C) What you are willing to give up to study for one additional hour.

7. Ans is D) focus on those features of reality assumed relevant for understanding a cause and effect relationship

8. Ans is C) Competition among wireless service providers across the borders of Canada, Mexico, and the United States has driven roaming rates down.