Chapter 1—The Central Idea
1. Economics is the study of how people cope with
a. unlimited resources.
b. too much money.
c. scarcity.
d. limited human wants.
e. political disputes.
ANS: C PTS: 1 DIF: basic OBJ: factual
NAT: The study of economics, and definitions in economics TOP: Scarcity
BLM: Bloom's: Knowledge
2. The concept of scarcity, as used by economists, refers to
a. a situation in which an item is very expensive.
b. a situation in which an item is available only in very small quantities.
c. a situation in which a resource is nonrenewable.
d. shortages.
e. a situation in which the available resources are not enough to satisfy the wants of the
people.
ANS: E PTS: 1 DIF: moderate OBJ: factual
NAT: Scarcity, tradeoffs, and opportunity cost TOP: Scarcity
BLM: Bloom's: Knowledge
3. The problem of scarcity is
, a. a problem only for poor countries.
b. a problem only for economies under complete government control.
c. faced by all economies.
d. eliminated as the economy grows.
e. not faced by free market economies.
ANS: C PTS: 1 DIF: moderate OBJ: factual
NAT: Scarcity, tradeoffs, and opportunity cost TOP: Scarcity
BLM: Bloom's: Knowledge
4. The basic economic problem is
a. lack of money.
b. unemployment.
c. poverty.
d. scarcity.
e. inflation.
ANS: D PTS: 1 DIF: basic OBJ: factual
NAT: Scarcity, tradeoffs, and opportunity cost TOP: Scarcity
BLM: Bloom's: Knowledge
5. Who faces the problem of scarcity?
a. Only the rich
b. Only the poor
c. Only people living next to wealthy people
d. Everyone
, e. Only people living next to poor people
ANS: D PTS: 1 DIF: moderate OBJ: factual
NAT: Scarcity, tradeoffs, and opportunity cost TOP: Scarcity
BLM: Bloom's: Knowledge
6. A resource is not scarce if
a. there is more of this resource than people want.
b. it can be found in any store.
c. people have enough money to pay for it.
d. it has a low opportunity cost.
e. its supply exceeds its demand.
ANS: A PTS: 1 DIF: moderate OBJ: factual
NAT: Scarcity, tradeoffs, and opportunity cost TOP: Scarcity
BLM: Bloom's: Knowledge
7. If a resource is always available when needed, then it
a. will be more expensive than other resources.
b. is not scarce.
c. has a high opportunity cost.
d. is not tangible.
e. is scarce.
ANS: B PTS: 1 DIF: basic OBJ: factual
NAT: Scarcity, tradeoffs, and opportunity cost TOP: Scarcity
BLM: Bloom's: Knowledge
, 8. An important implication of scarcity is that
a. it inhibits economic interaction.
b. people are not able to use all the available resources.
c. people must make a choice.
d. people will always be poor.
e. it is a problem that is easily abolished.
ANS: C PTS: 1 DIF: moderate OBJ: conceptual
NAT: Scarcity, tradeoffs, and opportunity cost TOP: Scarcity
BLM: Bloom's: Analysis | AACSB: Analytic
9. Economics is a study of
a. choices and interactions among people when resources are scarce.
b. how to overcome scarcity.
c. how to make choices and interact in order to avoid scarcity.
d. how to avoid scarcity by making choices.
e. how to make money in stock markets.
ANS: A PTS: 1 DIF: moderate OBJ: factual
NAT: The study of economics, and definitions in economics TOP: Economics
BLM: Bloom's: Knowledge
10. Economics deals with how
a. individuals make decisions to use scarce resources in order to satisfy their unlimited
wants.
b. to run a business.
1. Economics is the study of how people cope with
a. unlimited resources.
b. too much money.
c. scarcity.
d. limited human wants.
e. political disputes.
ANS: C PTS: 1 DIF: basic OBJ: factual
NAT: The study of economics, and definitions in economics TOP: Scarcity
BLM: Bloom's: Knowledge
2. The concept of scarcity, as used by economists, refers to
a. a situation in which an item is very expensive.
b. a situation in which an item is available only in very small quantities.
c. a situation in which a resource is nonrenewable.
d. shortages.
e. a situation in which the available resources are not enough to satisfy the wants of the
people.
ANS: E PTS: 1 DIF: moderate OBJ: factual
NAT: Scarcity, tradeoffs, and opportunity cost TOP: Scarcity
BLM: Bloom's: Knowledge
3. The problem of scarcity is
, a. a problem only for poor countries.
b. a problem only for economies under complete government control.
c. faced by all economies.
d. eliminated as the economy grows.
e. not faced by free market economies.
ANS: C PTS: 1 DIF: moderate OBJ: factual
NAT: Scarcity, tradeoffs, and opportunity cost TOP: Scarcity
BLM: Bloom's: Knowledge
4. The basic economic problem is
a. lack of money.
b. unemployment.
c. poverty.
d. scarcity.
e. inflation.
ANS: D PTS: 1 DIF: basic OBJ: factual
NAT: Scarcity, tradeoffs, and opportunity cost TOP: Scarcity
BLM: Bloom's: Knowledge
5. Who faces the problem of scarcity?
a. Only the rich
b. Only the poor
c. Only people living next to wealthy people
d. Everyone
, e. Only people living next to poor people
ANS: D PTS: 1 DIF: moderate OBJ: factual
NAT: Scarcity, tradeoffs, and opportunity cost TOP: Scarcity
BLM: Bloom's: Knowledge
6. A resource is not scarce if
a. there is more of this resource than people want.
b. it can be found in any store.
c. people have enough money to pay for it.
d. it has a low opportunity cost.
e. its supply exceeds its demand.
ANS: A PTS: 1 DIF: moderate OBJ: factual
NAT: Scarcity, tradeoffs, and opportunity cost TOP: Scarcity
BLM: Bloom's: Knowledge
7. If a resource is always available when needed, then it
a. will be more expensive than other resources.
b. is not scarce.
c. has a high opportunity cost.
d. is not tangible.
e. is scarce.
ANS: B PTS: 1 DIF: basic OBJ: factual
NAT: Scarcity, tradeoffs, and opportunity cost TOP: Scarcity
BLM: Bloom's: Knowledge
, 8. An important implication of scarcity is that
a. it inhibits economic interaction.
b. people are not able to use all the available resources.
c. people must make a choice.
d. people will always be poor.
e. it is a problem that is easily abolished.
ANS: C PTS: 1 DIF: moderate OBJ: conceptual
NAT: Scarcity, tradeoffs, and opportunity cost TOP: Scarcity
BLM: Bloom's: Analysis | AACSB: Analytic
9. Economics is a study of
a. choices and interactions among people when resources are scarce.
b. how to overcome scarcity.
c. how to make choices and interact in order to avoid scarcity.
d. how to avoid scarcity by making choices.
e. how to make money in stock markets.
ANS: A PTS: 1 DIF: moderate OBJ: factual
NAT: The study of economics, and definitions in economics TOP: Economics
BLM: Bloom's: Knowledge
10. Economics deals with how
a. individuals make decisions to use scarce resources in order to satisfy their unlimited
wants.
b. to run a business.
