, Chapter 1
Economics: The Study of Opportunity Cost
Multiple Choice
1) Economics is the study of
A) how much people should buy and the prices they should be willing to pay.
B) how much people should sell and the prices they should be willing to accept.
C) the allocation of the world's freely available resources and who should get them.
D) the allocation and use of scarce resources to satisfy unlimited human wants.
Answer: D
Learning Objective: 01-01
Topic: Economics and Opportunity Cost
Blooms: Remember
AACSB: Analytical Thinking
Difficulty: 1 Easy
2) The one word in the definition of economics that focuses on the fact that it is impossible to
provide all of the goods and services that everyone wants is
A) scarcity.
B) resources.
C) study.
D) allocation.
Answer: A
Learning Objective: 01-01
Topic: Economics and Opportunity Cost
Blooms: Understand
AACSB: Analytical Thinking
Difficulty: 1 Easy
3) The one word in the definition of economics that focuses on the fact that we have to make
choices about who gets what and how much is
A) scarcity.
B) resources.
C) study.
D) allocation.
Answer: D
Learning Objective: 01-01
Topic: Economics and Opportunity Cost
Blooms: Understand
AACSB: Analytical Thinking
Difficulty: 1 Easy
Page 1
© 2018 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner.
This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.
, 4) Economists focus on “unlimited human wants” rather than _____ to describe our pursuit of
goods and services.
A) needs
B) prices
C) output
D) physical requirements
Answer: A
Learning Objective: 01-01
Topic: Economics and Opportunity Cost
Blooms: Understand
AACSB: Analytical Thinking
Difficulty: 1 Easy
5) Scarcity implies that the allocation scheme chosen by society can
A) not make more of any one good.
B) typically make more of a good but at the expense of making less of another.
C) always make more of all goods simultaneously.
Answer: C
Learning Objective: 01-01
Topic: Economics and Opportunity Cost
Blooms: Understand
AACSB: Analytical Thinking
Difficulty: 1 Easy
6) Production possibilities frontier models
A) the choices we make in setting prices.
B) the choices we make in setting output alternatives.
C) the choices we make in setting wages.
D) the choices we make in setting incomes.
Answer: B
Learning Objective: 01-01
Topic: Economics and Opportunity Cost
Blooms: Remember
AACSB: Analytical Thinking
Difficulty: 1 Easy
Page 2
© 2018 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner.
This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.
, 7) A production possibilities frontier is a simple model of
A) scarcity and allocation.
B) prices and output.
C) production and costs.
D) inputs and outputs.
Answer: A
Learning Objective: 01-01
Topic: Economics and Opportunity Cost
Blooms: Remember
AACSB: Analytical Thinking
Difficulty: 1 Easy
8) A simplifying assumption is typically made so as to
A) make a point clearer by stripping away excess detail.
B) make a point clearer by adding sufficient detail to get things precise.
C) divert attention from the real problem.
D) make things look better than they really are.
Answer: A
Learning Objective: 01-01
Topic: Economics and Opportunity Cost
Blooms: Understand
AACSB: Analytical Thinking
Difficulty: 1 Easy
9) Something is scarce as long as
A) there is a price that the market puts on the item.
B) there is no freely available infinite source of the item.
C) the government provides it.
D) the market provides it.
Answer: B
Learning Objective: 01-01
Topic: Economics and Opportunity Cost
Blooms: Understand
AACSB: Analytical Thinking
Difficulty: 1 Easy
Page 3
© 2018 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner.
This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.
Economics: The Study of Opportunity Cost
Multiple Choice
1) Economics is the study of
A) how much people should buy and the prices they should be willing to pay.
B) how much people should sell and the prices they should be willing to accept.
C) the allocation of the world's freely available resources and who should get them.
D) the allocation and use of scarce resources to satisfy unlimited human wants.
Answer: D
Learning Objective: 01-01
Topic: Economics and Opportunity Cost
Blooms: Remember
AACSB: Analytical Thinking
Difficulty: 1 Easy
2) The one word in the definition of economics that focuses on the fact that it is impossible to
provide all of the goods and services that everyone wants is
A) scarcity.
B) resources.
C) study.
D) allocation.
Answer: A
Learning Objective: 01-01
Topic: Economics and Opportunity Cost
Blooms: Understand
AACSB: Analytical Thinking
Difficulty: 1 Easy
3) The one word in the definition of economics that focuses on the fact that we have to make
choices about who gets what and how much is
A) scarcity.
B) resources.
C) study.
D) allocation.
Answer: D
Learning Objective: 01-01
Topic: Economics and Opportunity Cost
Blooms: Understand
AACSB: Analytical Thinking
Difficulty: 1 Easy
Page 1
© 2018 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner.
This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.
, 4) Economists focus on “unlimited human wants” rather than _____ to describe our pursuit of
goods and services.
A) needs
B) prices
C) output
D) physical requirements
Answer: A
Learning Objective: 01-01
Topic: Economics and Opportunity Cost
Blooms: Understand
AACSB: Analytical Thinking
Difficulty: 1 Easy
5) Scarcity implies that the allocation scheme chosen by society can
A) not make more of any one good.
B) typically make more of a good but at the expense of making less of another.
C) always make more of all goods simultaneously.
Answer: C
Learning Objective: 01-01
Topic: Economics and Opportunity Cost
Blooms: Understand
AACSB: Analytical Thinking
Difficulty: 1 Easy
6) Production possibilities frontier models
A) the choices we make in setting prices.
B) the choices we make in setting output alternatives.
C) the choices we make in setting wages.
D) the choices we make in setting incomes.
Answer: B
Learning Objective: 01-01
Topic: Economics and Opportunity Cost
Blooms: Remember
AACSB: Analytical Thinking
Difficulty: 1 Easy
Page 2
© 2018 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner.
This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.
, 7) A production possibilities frontier is a simple model of
A) scarcity and allocation.
B) prices and output.
C) production and costs.
D) inputs and outputs.
Answer: A
Learning Objective: 01-01
Topic: Economics and Opportunity Cost
Blooms: Remember
AACSB: Analytical Thinking
Difficulty: 1 Easy
8) A simplifying assumption is typically made so as to
A) make a point clearer by stripping away excess detail.
B) make a point clearer by adding sufficient detail to get things precise.
C) divert attention from the real problem.
D) make things look better than they really are.
Answer: A
Learning Objective: 01-01
Topic: Economics and Opportunity Cost
Blooms: Understand
AACSB: Analytical Thinking
Difficulty: 1 Easy
9) Something is scarce as long as
A) there is a price that the market puts on the item.
B) there is no freely available infinite source of the item.
C) the government provides it.
D) the market provides it.
Answer: B
Learning Objective: 01-01
Topic: Economics and Opportunity Cost
Blooms: Understand
AACSB: Analytical Thinking
Difficulty: 1 Easy
Page 3
© 2018 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner.
This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.
