Exam Microeconomics, 17th Canadian Edition, 17e By Christopher Ragan (Test Bank Chapter 1 Economic Issues and Concepts 1.1 What Is Economics? 1) Which of the following statements provides the best definition of economics? A) The study of the most equitable distribution of scarce resources. B) The study of the use of scarce resources to satisfy unlimited human wants. C) The study of the production of goods and services. D) The study of the productive capacity of a nation's factors of production. E) The study of production and increasing its efficiency. Answer: B Diff: 1 Type: MC Topic: 1.1a. economics/resources Skill: Recall Learning Obj.: 1-1 Explain the importance of scarcity, choice, and opportunity cost, and how each is illustrated by the production possibilities boundary. Category: Qualitative 2) Society's resources are often divided into broad categories. They are A) goods and services. B) factors of consumption. C) land, labour, and capital. D) population and natural resources. E) tangible commodities and intangible commodities. Answer: C Diff: 1 Type: MC Topic: 1.1a. economics/resources Skill: Recall Learning Obj.: 1-1 Explain the importance of scarcity, choice, and opportunity cost, and how each is illustrated by the production possibilities boundary. Category: Qualitative 3) Consider the following list: a worker with training in video gaming technology, 10 hectares of arable land in southern Ontario, a fishing trawler in Nova Scotia, an ice-cream truck at a park in Quebec. Each of these is an example of A) a factor of production. B) a capital resource. C) a commodity. D) goods and services. E) an economic service. Answer: A Diff: 1 Type: MC Topic: 1.1a. economics/resources Skill: Applied Learning Obj.: 1-1 Explain the importance of scarcity, choice, and opportunity cost, and how each is illustrated by the production possibilities boundary. Category: Qualitative 4) Which of the following is NOT considered a "factor of production" in economics? A) the espresso machine at your local cafe B) the barista who makes the coffee C) the espresso drink you purchase D) the wood stir sticks E) the land on which the cafe sits Answer: C Diff: 2 Type: MC Topic: 1.1a. economics/resources Skill: Applied Learning Obj.: 1-1 Explain the importance of scarcity, choice, and opportunity cost, and how each is illustrated by the production possibilities boundary. Category: Qualitative 5) Consider the following factors of production: - a pharmaceutical research centre - a hairstylist's scissors - Google headquarters - a cloud computing system - a stapler at a checkout counter. Each of these is an example of A) land. B) goods. C) services. D) capital. E) labour. Answer: D Diff: 2 Type: MC Topic: 1.1a. economics/resources Skill: Applied Learning Obj.: 1-1 Explain the importance of scarcity, choice, and opportunity cost, and how each is illustrated by the production possibilities boundary. Category: Qualitative 6) In economics, what word is used to describe the act of using goods or services to satisfy wants? A) consumption B) production C) purchasing power D) investment E) shopping Answer: A Diff: 2 Type: MC Topic: 1.1a. economics/resources Skill: Recall Learning Obj.: 1-1 Explain the importance of scarcity, choice, and opportunity cost, and how each is illustrated by the production possibilities boundary. Category: Qualitative 7) A basic underlying point in economics is that A) people have unlimited wants in the face of limited resources. B) there are unlimited resources. C) governments should satisfy the needs of the people. D) people have limited wants in the face of limited resources. E) governments should never interfere in the workings of a market economy. Answer: A Diff: 1 Type: MC Topic: 1.1b. scarcity and choice Skill: Recall Learning Obj.: 1-1 Explain the importance of scarcity, choice, and opportunity cost, and how each is illustrated by the production possibilities boundary. Category: Qualitative 8) Which of the following best describes the study of economics? A) how to plan an economy B) how to limit human wants so that scarce resources are sufficient C) why resources are scarce D) the allocation of scarce resources among alternative uses E) how to distribute income as equally as possible Answer: D Diff: 1 Type: MC Topic: 1.1b. scarcity and choice Skill: Recall Learning Obj.: 1-1 Explain the importance of scarcity, choice, and opportunity cost, and how each is illustrated by the production possibilities boundary. Category: Qualitative 9) Economics can best be described as A) the study of how a society ought to allocate its resources. B) the study of the use of scarce resources to satisfy unlimited human wants. C) the application of sophisticated mathematical models to address social problems. D) a normative science. E) the study of how to reduce inflation and unemployment. Answer: B Diff: 1 Type: MC Topic: 1.1b. scarcity and choice Skill: Recall Learning Obj.: 1-1 Explain the importance of scarcity, choice, and opportunity cost, and how each is illustrated by the production possibilities boundary. Category: Qualitative 10) Scarcity is likely to be A) a problem that will be solved by the proper use of available resources. B) unique to the twenty-first century. C) a problem that will always exist. D) a result of the work ethic. E) eliminated with a better understanding of economics. Answer: C Diff: 2 Type: MC Topic: 1.1b. scarcity and choice Skill: Applied Learning Obj.: 1-1 Explain the importance of scarcity, choice, and opportunity cost, and how each is illustrated by the production possibilities boundary. Category: Qualitative 11) Which of the following statements best describes the economic concept of scarcity? A) Society is not employing all of its available resources in an efficient manner. B) People's wants can never be satisfied by the available resources. C) Scarcity afflicts only poor countries. D) Too many frivolous goods and services are produced at the expense of socially desirable goods and services. E) Production is efficient, but distribution is inefficient. Answer: B Diff: 2 Type: MC Topic: 1.1b. scarcity and choice Skill: Recall Learning Obj.: 1-1 Explain the importance of scarcity, choice, and opportunity cost, and how each is illustrated by the production possibilities boundary. Category: Qualitative 12) Which of the following statements best describes the underlying feature of most economic problems? A) People have unlimited wants in the face of limited resources. B) There are unlimited resources. C) Resources are distributed fairly. D) People have limited wants in the face of limited resources. E) Governments should never interfere in the workings of a market economy. Answer: A Diff: 1 Type: MC Topic: 1.1b. scarcity and choice Skill: Recall Learning Obj.: 1-1 Explain the importance of scarcity, choice, and opportunity cost, and how each is illustrated by the production possibilities boundary. Category: Qualitative 13) Because resources are scarce, individuals are required to A) make choices among alternatives. B) use resources inefficiently. C) sacrifice production but not consumption. D) improve distribution but not production. E) improve production but not distribution. Answer: A Diff: 2 Type: MC Topic: 1.1b. scarcity and choice Skill: Recall Learning Obj.: 1-1 Explain the importance of scarcity, choice, and opportunity cost, and how each is illustrated by the production possibilities boundary. Category: Qualitative 14) Scarcity implies that choices must be made. Making choices implies A) the wasteful use of resources. B) that scarcity can be eliminated. C) the existence of costs of production. D) the existence of opportunity costs. E) both C and D above. Answer: D Diff: 2 Type: MC Topic: 1.1c. opportunity cost Skill: Recall Learning Obj.: 1-1 Explain the importance of scarcity, choice, and opportunity cost, and how each is illustrated by the production possibilities boundary. Category: Qualitative 15) Which of the following best completes the definition of opportunity cost? The opportunity cost of choosing any one alternative is the A) market cost of the next best alternative. B) value of the next best alternative that is given up. C) the revenues that would be given up if that alternative is not chosen. D) value of all other alternatives combined. E) value of resources used to make that alternative available to the market. Answer: B Diff: 2 Type: MC Topic: 1.1c. opportunity cost Skill: Recall Learning Obj.: 1-1 Explain the importance of scarcity, choice, and opportunity cost, and how each is illustrated by the production possibilities boundary. Category: Qualitative pdf
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