,Chapter 01 - The Economic Problem
Chapter 01
The Economic Problem
Multiple Choice Questions
1. What do economists mean when they say that the economy faces scarcity?
A. There are fewer resources available than there were in the 1960s.
B. It is quite evident that the world is running out of resources.
C. The economy is producing far below its capacity to produce.
D. The resources available are not sufficient to produce all that everyone wants.
Accessibility: Keyboard Navigation
Blooms: Remember
Blooms: Understand
Difficulty: Easy
Learning Objective: 01-03 Demonstrate that because scarcity; choice; and opportunity cost are at the heart of economics; efficiency—both
productive and allocative—provides a major cornerstone.
Topic: 01-07 Efficiency and Allocation
2. What do economists assume is true about human wants?
A. They are easily defined.
B. That we are on the verge of being able to satisfy them.
C. They are unlimited.
D. They haven't changed much over the centuries.
Accessibility: Keyboard Navigation
Blooms: Remember
Blooms: Understand
Difficulty: Easy
Learning Objective: 01-03 Demonstrate that because scarcity; choice; and opportunity cost are at the heart of economics; efficiency—both
productive and allocative—provides a major cornerstone.
Topic: 01-07 Efficiency and Allocation
1-1
,Chapter 01 - The Economic Problem
3. Which of the following terms describes the next best alternative that must be sacrificed as a
result of making a particular choice?
A. Microeconomics.
B. Opportunity cost.
C. Macroeconomics.
D. The law of increasing costs.
E. Scarcity.
Accessibility: Keyboard Navigation
Blooms: Remember
Blooms: Understand
Difficulty: Easy
Learning Objective: 01-03 Demonstrate that because scarcity; choice; and opportunity cost are at the heart of economics; efficiency—both
productive and allocative—provides a major cornerstone.
Topic: 01-07 Efficiency and Allocation
4. What is the opportunity cost of a particular product?
A. The price paid for that product.
B. The value put on that product by the person who bought it.
C. The value of the next-best alternative that is given up as a result of buying that particular
product.
D. The combined value of all the other alternatives that are given up as a result of buying that
particular product.
Accessibility: Keyboard Navigation
Blooms: Remember
Blooms: Understand
Difficulty: Easy
Learning Objective: 01-03 Demonstrate that because scarcity; choice; and opportunity cost are at the heart of economics; efficiency—both
productive and allocative—provides a major cornerstone.
Topic: 01-07 Efficiency and Allocation
1-2
, Chapter 01 - The Economic Problem
5. Gwen had only $10 yesterday. She was uncertain whether to go out for lunch or to buy
beer. In the end, she bought beer. Which of the following statements is correct?
A. The choice of the beer and not lunch is an example of constant costs.
B. The cost of buying beer is less than lunch.
C. The opportunity cost of beer is lunch.
D. The opportunity cost of beer is $10.
Accessibility: Keyboard Navigation
Blooms: Analyze
Blooms: Apply
Difficulty: Easy
Learning Objective: 01-03 Demonstrate that because scarcity; choice; and opportunity cost are at the heart of economics; efficiency—both
productive and allocative—provides a major cornerstone.
Topic: 01-07 Efficiency and Allocation
6. Which of the following is correct?
A. Scarcity forces choice which involves opportunity costs.
B. Choice causes scarcity which involves increasing costs.
C. Choice causes scarcity which involves opportunity costs.
D. Scarcity forces choice which involves increasing costs.
Accessibility: Keyboard Navigation
Blooms: Remember
Blooms: Understand
Difficulty: Easy
Learning Objective: 01-03 Demonstrate that because scarcity; choice; and opportunity cost are at the heart of economics; efficiency—both
productive and allocative—provides a major cornerstone.
Topic: 01-07 Efficiency and Allocation
7. What can we say is true as a result of people engaging in voluntary trade?
A. One person gains and the other loses.
B. One person gains while there is a neutral effect on the other person.
C. Both people gain.
D. Neither person gains.
Accessibility: Keyboard Navigation
Blooms: Remember
Blooms: Understand
Difficulty: Easy
Learning Objective: 01-04 Explain why greater trade results in more productive economies.
Topic: 01-09 The Power of Trade
1-3
Chapter 01
The Economic Problem
Multiple Choice Questions
1. What do economists mean when they say that the economy faces scarcity?
A. There are fewer resources available than there were in the 1960s.
B. It is quite evident that the world is running out of resources.
C. The economy is producing far below its capacity to produce.
D. The resources available are not sufficient to produce all that everyone wants.
Accessibility: Keyboard Navigation
Blooms: Remember
Blooms: Understand
Difficulty: Easy
Learning Objective: 01-03 Demonstrate that because scarcity; choice; and opportunity cost are at the heart of economics; efficiency—both
productive and allocative—provides a major cornerstone.
Topic: 01-07 Efficiency and Allocation
2. What do economists assume is true about human wants?
A. They are easily defined.
B. That we are on the verge of being able to satisfy them.
C. They are unlimited.
D. They haven't changed much over the centuries.
Accessibility: Keyboard Navigation
Blooms: Remember
Blooms: Understand
Difficulty: Easy
Learning Objective: 01-03 Demonstrate that because scarcity; choice; and opportunity cost are at the heart of economics; efficiency—both
productive and allocative—provides a major cornerstone.
Topic: 01-07 Efficiency and Allocation
1-1
,Chapter 01 - The Economic Problem
3. Which of the following terms describes the next best alternative that must be sacrificed as a
result of making a particular choice?
A. Microeconomics.
B. Opportunity cost.
C. Macroeconomics.
D. The law of increasing costs.
E. Scarcity.
Accessibility: Keyboard Navigation
Blooms: Remember
Blooms: Understand
Difficulty: Easy
Learning Objective: 01-03 Demonstrate that because scarcity; choice; and opportunity cost are at the heart of economics; efficiency—both
productive and allocative—provides a major cornerstone.
Topic: 01-07 Efficiency and Allocation
4. What is the opportunity cost of a particular product?
A. The price paid for that product.
B. The value put on that product by the person who bought it.
C. The value of the next-best alternative that is given up as a result of buying that particular
product.
D. The combined value of all the other alternatives that are given up as a result of buying that
particular product.
Accessibility: Keyboard Navigation
Blooms: Remember
Blooms: Understand
Difficulty: Easy
Learning Objective: 01-03 Demonstrate that because scarcity; choice; and opportunity cost are at the heart of economics; efficiency—both
productive and allocative—provides a major cornerstone.
Topic: 01-07 Efficiency and Allocation
1-2
, Chapter 01 - The Economic Problem
5. Gwen had only $10 yesterday. She was uncertain whether to go out for lunch or to buy
beer. In the end, she bought beer. Which of the following statements is correct?
A. The choice of the beer and not lunch is an example of constant costs.
B. The cost of buying beer is less than lunch.
C. The opportunity cost of beer is lunch.
D. The opportunity cost of beer is $10.
Accessibility: Keyboard Navigation
Blooms: Analyze
Blooms: Apply
Difficulty: Easy
Learning Objective: 01-03 Demonstrate that because scarcity; choice; and opportunity cost are at the heart of economics; efficiency—both
productive and allocative—provides a major cornerstone.
Topic: 01-07 Efficiency and Allocation
6. Which of the following is correct?
A. Scarcity forces choice which involves opportunity costs.
B. Choice causes scarcity which involves increasing costs.
C. Choice causes scarcity which involves opportunity costs.
D. Scarcity forces choice which involves increasing costs.
Accessibility: Keyboard Navigation
Blooms: Remember
Blooms: Understand
Difficulty: Easy
Learning Objective: 01-03 Demonstrate that because scarcity; choice; and opportunity cost are at the heart of economics; efficiency—both
productive and allocative—provides a major cornerstone.
Topic: 01-07 Efficiency and Allocation
7. What can we say is true as a result of people engaging in voluntary trade?
A. One person gains and the other loses.
B. One person gains while there is a neutral effect on the other person.
C. Both people gain.
D. Neither person gains.
Accessibility: Keyboard Navigation
Blooms: Remember
Blooms: Understand
Difficulty: Easy
Learning Objective: 01-04 Explain why greater trade results in more productive economies.
Topic: 01-09 The Power of Trade
1-3
