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
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.
User2: 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
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.
User2: 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
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.
User2: Qualitative
, 4) 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
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.
User2: Qualitative
5) 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
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.
User2: Qualitative
6) 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
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.
User2: Qualitative
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
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.
User2: 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
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.
User2: 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
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.
User2: Qualitative
, 4) 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
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.
User2: Qualitative
5) 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
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.
User2: Qualitative
6) 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
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.
User2: Qualitative
