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File: Chapter 001 Thinking Like an Economist
Multiple Choice Questions
1. Economics is best defined as the study of:
A. inflation, interest rates and the stock market.
B. supply and demand.
C. how people make choices in the face of scarcity and the implications of
those choices for society as a whole.
D. the financial concerns of businesses and individuals.
Ans: C
Difficulty: 01 Easy
Learning Objective: 01-01
Topic: Economics: Studying Choice in a World of Scarcity
Blooms: Remember
AACSB: Reflective Thinking
Feedback: Economics is the study of how people make choices under
conditions of scarcity and the implications of those choices for society as a
whole.
2. Economics is best defined as the study of:
A. the financial concerns of businesses and individuals.
B. the role of government in limiting the choices people make.
C. choice in the face of limited resources.
D. whether we will have enough resources in the future.
Ans: C
Difficulty: 01 Easy
Learning Objective: 01-01
Topic: Economics: Studying Choice in a World of Scarcity
Blooms: Remember
AACSB: Reflective Thinking
Feedback: Economics is the study of how people make choices under
conditions of scarcity and the implications of those choices for society as a
whole.
3. Economists recognize that because people have limited resources:
A. government intervention is necessary.
B. they have to make trade-offs.
C. they will never be happy.
D. our future is bleak.
Ans: B
Difficulty: 01 Easy
Learning Objective: 01-01
Topic: Economics: Studying Choice in a World of Scarcity
Blooms: Remember
1
Full download please contact qidiantiku.com or
,Full download please contact qidiantiku.com or
AACSB: Reflective Thinking
Feedback: Economists recognize that the resources available to us are
limited, so having more of one good thing means having less of another.
4. The Scarcity Principle states that:
A. people don't have enough money to buy what they want.
B. society will eventually run out of resources.
C. with limited resources, having more of one thing means having less of
another.
D. some countries have fewer resources than others.
Ans: C
Difficulty: 01 Easy
Learning Objective: 01-01
Topic: Economics: Studying Choice in a World of Scarcity
Blooms: Remember
AACSB: Reflective Thinking
Feedback: The Scarcity Principle states that although we have boundless
needs and wants, the resources available to us are limited. So having more
of one thing means having less of another.
5. An implication of scarcity is that:
A. people will never be happy.
B. making trade-offs becomes unnecessary as wealth increases.
C. some people will always be poor.
D. people must make trade-offs.
Ans: D
Difficulty: 01 Easy
Learning Objective: 01-01
Topic: Economics: Studying Choice in a World of Scarcity
Blooms: Remember
AACSB: Reflective Thinking
Feedback: The Scarcity Principle states that although we have boundless
needs and wants, the resources available to us are limited. So having more
of one thing means having less of another.
6. If all the world’s resources were to magically increase one hundredfold,
then:
A. people would still have to make trade-offs.
B. economics would no longer be relevant.
C. scarcity would disappear.
D. trade-offs would become unnecessary.
Ans: A
Difficulty: 02 Medium
Learning Objective: 01-01
Topic: Economics: Studying Choice in a World of Scarcity
Blooms: Understand
2
Full download please contact qidiantiku.com or
,Full download please contact qidiantiku.com or
AACSB: Reflective Thinking
Feedback: Economists assume that resources will always be scarce relative
to people's wants.
7. The Scarcity Principle applies to:
A. poor people primarily.
B. consumers primarily.
C. firms primarily.
D. everyone.
Ans: D
Difficulty: 01 Easy
Learning Objective: 01-01
Topic: Economics: Studying Choice in a World of Scarcity
Blooms: Remember
AACSB: Reflective Thinking
Feedback: Everyone has boundless wants and limited resources.
8. Forest lives in complete isolation in Montana. He is self-sufficient and
feeds himself through hunting, fishing, and farming. Which of the following
statements about Forest is true?
A. Forest has unlimited resources.
B. Forest is not required to make trade-offs because he is self-sufficient.
C. Forest has to make trade-offs.
D. Forest doesn’t have to consider costs and benefits.
Ans: C
Difficulty: 01 Easy
Learning Objective: 01-01
Topic: Economics: Studying Choice in a World of Scarcity
Blooms: Understand
AACSB: Reflective Thinking
Feedback: Even if Forest is self-sufficient, he still has limited resources and
unlimited wants. For example, he might want to have more than 24 hours in
a day. Thus, he still has to make trade-offs.
9. The Scarcity Principle applies to:
A. all decisions.
B. only market decisions, e.g., buying a car.
C. only non-market decisions, e.g., watching a sunset.
D. only the poor.
Ans: A
Difficulty: 01 Easy
Learning Objective: 01-01
Topic: Economics: Studying Choice in a World of Scarcity
Blooms: Remember
AACSB: Reflective Thinking
3
Full download please contact qidiantiku.com or
, Full download please contact qidiantiku.com or
Feedback: Economists assume that resources will always be scarce relative
to people's wants.
10. Chris has a one-hour break between classes every Wednesday. Chris can
either stay at the library and study or go to the gym and work out. The
decision Chris must make is:
A. not an economic problem because neither activity costs money.
B. not an economic problem because it’s an hour that Chris has no matter
what he does.
C. an economic problem because the tuition Chris pays covers the cost of
both the gym and the library.
D. an economic problem because Chris has only one hour, and engaging in
one activity means giving up the other.
Ans: D
Difficulty: 02 Medium
Learning Objective: 01-01
Topic: Economics: Studying Choice in a World of Scarcity
Blooms: Understand
AACSB: Reflective Thinking
Feedback: Chris has to make a trade-off: if Chris goes to the gym, Chris
cannot also study and vice versa.
11. Josh wants to go to the football game this weekend, but he has a paper
due on Monday. It will take him the whole weekend to write the paper. Josh
decides to stay home and work on the paper. According to the Scarcity
Principle, the reason Josh doesn’t go to the game is that:
A. Josh prefers schoolwork to football games.
B. writing the paper is easier than going to the game.
C. Josh can’t go the game and finish the paper.
D. going to the game won’t be fun.
Ans: C
Difficulty: 02 Medium
Learning Objective: 01-01
Topic: Economics: Studying Choice in a World of Scarcity
Blooms: Understand
AACSB: Reflective Thinking
Feedback: Josh has to make a trade-off: time is a scarce resource and so he
must choose between the two activities.
12. Whether studying the output of the U.S. economy or how many classes a
student will take, a unifying concept is that:
A. wants are limited and resources are unlimited, so trade-offs are
unnecessary.
B. wants are unlimited and resources are scarce, so trade-offs have to be
made.
4
Full download please contact qidiantiku.com or
File: Chapter 001 Thinking Like an Economist
Multiple Choice Questions
1. Economics is best defined as the study of:
A. inflation, interest rates and the stock market.
B. supply and demand.
C. how people make choices in the face of scarcity and the implications of
those choices for society as a whole.
D. the financial concerns of businesses and individuals.
Ans: C
Difficulty: 01 Easy
Learning Objective: 01-01
Topic: Economics: Studying Choice in a World of Scarcity
Blooms: Remember
AACSB: Reflective Thinking
Feedback: Economics is the study of how people make choices under
conditions of scarcity and the implications of those choices for society as a
whole.
2. Economics is best defined as the study of:
A. the financial concerns of businesses and individuals.
B. the role of government in limiting the choices people make.
C. choice in the face of limited resources.
D. whether we will have enough resources in the future.
Ans: C
Difficulty: 01 Easy
Learning Objective: 01-01
Topic: Economics: Studying Choice in a World of Scarcity
Blooms: Remember
AACSB: Reflective Thinking
Feedback: Economics is the study of how people make choices under
conditions of scarcity and the implications of those choices for society as a
whole.
3. Economists recognize that because people have limited resources:
A. government intervention is necessary.
B. they have to make trade-offs.
C. they will never be happy.
D. our future is bleak.
Ans: B
Difficulty: 01 Easy
Learning Objective: 01-01
Topic: Economics: Studying Choice in a World of Scarcity
Blooms: Remember
1
Full download please contact qidiantiku.com or
,Full download please contact qidiantiku.com or
AACSB: Reflective Thinking
Feedback: Economists recognize that the resources available to us are
limited, so having more of one good thing means having less of another.
4. The Scarcity Principle states that:
A. people don't have enough money to buy what they want.
B. society will eventually run out of resources.
C. with limited resources, having more of one thing means having less of
another.
D. some countries have fewer resources than others.
Ans: C
Difficulty: 01 Easy
Learning Objective: 01-01
Topic: Economics: Studying Choice in a World of Scarcity
Blooms: Remember
AACSB: Reflective Thinking
Feedback: The Scarcity Principle states that although we have boundless
needs and wants, the resources available to us are limited. So having more
of one thing means having less of another.
5. An implication of scarcity is that:
A. people will never be happy.
B. making trade-offs becomes unnecessary as wealth increases.
C. some people will always be poor.
D. people must make trade-offs.
Ans: D
Difficulty: 01 Easy
Learning Objective: 01-01
Topic: Economics: Studying Choice in a World of Scarcity
Blooms: Remember
AACSB: Reflective Thinking
Feedback: The Scarcity Principle states that although we have boundless
needs and wants, the resources available to us are limited. So having more
of one thing means having less of another.
6. If all the world’s resources were to magically increase one hundredfold,
then:
A. people would still have to make trade-offs.
B. economics would no longer be relevant.
C. scarcity would disappear.
D. trade-offs would become unnecessary.
Ans: A
Difficulty: 02 Medium
Learning Objective: 01-01
Topic: Economics: Studying Choice in a World of Scarcity
Blooms: Understand
2
Full download please contact qidiantiku.com or
,Full download please contact qidiantiku.com or
AACSB: Reflective Thinking
Feedback: Economists assume that resources will always be scarce relative
to people's wants.
7. The Scarcity Principle applies to:
A. poor people primarily.
B. consumers primarily.
C. firms primarily.
D. everyone.
Ans: D
Difficulty: 01 Easy
Learning Objective: 01-01
Topic: Economics: Studying Choice in a World of Scarcity
Blooms: Remember
AACSB: Reflective Thinking
Feedback: Everyone has boundless wants and limited resources.
8. Forest lives in complete isolation in Montana. He is self-sufficient and
feeds himself through hunting, fishing, and farming. Which of the following
statements about Forest is true?
A. Forest has unlimited resources.
B. Forest is not required to make trade-offs because he is self-sufficient.
C. Forest has to make trade-offs.
D. Forest doesn’t have to consider costs and benefits.
Ans: C
Difficulty: 01 Easy
Learning Objective: 01-01
Topic: Economics: Studying Choice in a World of Scarcity
Blooms: Understand
AACSB: Reflective Thinking
Feedback: Even if Forest is self-sufficient, he still has limited resources and
unlimited wants. For example, he might want to have more than 24 hours in
a day. Thus, he still has to make trade-offs.
9. The Scarcity Principle applies to:
A. all decisions.
B. only market decisions, e.g., buying a car.
C. only non-market decisions, e.g., watching a sunset.
D. only the poor.
Ans: A
Difficulty: 01 Easy
Learning Objective: 01-01
Topic: Economics: Studying Choice in a World of Scarcity
Blooms: Remember
AACSB: Reflective Thinking
3
Full download please contact qidiantiku.com or
, Full download please contact qidiantiku.com or
Feedback: Economists assume that resources will always be scarce relative
to people's wants.
10. Chris has a one-hour break between classes every Wednesday. Chris can
either stay at the library and study or go to the gym and work out. The
decision Chris must make is:
A. not an economic problem because neither activity costs money.
B. not an economic problem because it’s an hour that Chris has no matter
what he does.
C. an economic problem because the tuition Chris pays covers the cost of
both the gym and the library.
D. an economic problem because Chris has only one hour, and engaging in
one activity means giving up the other.
Ans: D
Difficulty: 02 Medium
Learning Objective: 01-01
Topic: Economics: Studying Choice in a World of Scarcity
Blooms: Understand
AACSB: Reflective Thinking
Feedback: Chris has to make a trade-off: if Chris goes to the gym, Chris
cannot also study and vice versa.
11. Josh wants to go to the football game this weekend, but he has a paper
due on Monday. It will take him the whole weekend to write the paper. Josh
decides to stay home and work on the paper. According to the Scarcity
Principle, the reason Josh doesn’t go to the game is that:
A. Josh prefers schoolwork to football games.
B. writing the paper is easier than going to the game.
C. Josh can’t go the game and finish the paper.
D. going to the game won’t be fun.
Ans: C
Difficulty: 02 Medium
Learning Objective: 01-01
Topic: Economics: Studying Choice in a World of Scarcity
Blooms: Understand
AACSB: Reflective Thinking
Feedback: Josh has to make a trade-off: time is a scarce resource and so he
must choose between the two activities.
12. Whether studying the output of the U.S. economy or how many classes a
student will take, a unifying concept is that:
A. wants are limited and resources are unlimited, so trade-offs are
unnecessary.
B. wants are unlimited and resources are scarce, so trade-offs have to be
made.
4
Full download please contact qidiantiku.com or
