ECON 1001 - Chapter 1
(Limits, Alternatives,
and Choices) with
complete verified
solutions
A statement about economic behavior or the economy that enables
prediction of the probable effects of certain actions is known as a(n) ______. -
answer economic principle.
The ______ problem refers to the need to make choices because economic
wants exceed economic means. - answer economizing
A production possibilities curve (PPC) illustrates the attainable combination
______,
a) of two goods that can be produced given a limited amount of income
b) of two goods that can be produced given a specific set of resources
c) of many goods that can be produced given an unlimited amount of
resources
d) of two goods that can be produced given an unlimited amount of
resources - answer b) of two goods that can be produced given a specific set
of resources
What does every point on a budget line graph represent?
a) All combinations of goods that unattainable with a given income
b) All combinations of goods that can be purchased with a given income
,c) The maximum utility achievable at a given income
d) The minimum income required to purchase two or more goods at the
same time - answer b) All combinations of goods that can be purchased with
a given income
True or false: Economists use the terms "capital" and "money"
interchangeably. - answer False!
Which statements best describe the combinations of goods that lie on the
production possibilities curve?
a) They are attainable.
b) They are unattainable.
c) They utilize all of an economy's available resources.
d) They represent an underallocation of resources. - answer a) They are
attainable.
c) They utilize all of an economy's available resources.
Unemployment in the economy is graphically represented by ______ the
production possibilities curve.
a) a change to a new point on
b) a rightward shift of
c) a movement outside
d) points inside - answer d) points inside
______ economic resources means limited goods and services.
a) Physical
b) Tangible
c) Insatiable
d) Scarce - answer d) Scarce
, Suppose an economy produces consumer goods and capital goods. Its
current combination of production involves a higher level of capital goods
than consumer goods. Which of the following can be inferred from this
current choice on its production possibilities curve?
a) That its present choice in production may result in higher future prospects
for economic growth
b) That its present choice in production has no effect on future prospects for
economic growth
c) That its future choice in production may result in higher present prospects
for economic growth
d) That its present choice in production may result in lower future prospects
for economic growth - answer a) That its present choice in production may
result in higher future prospects for economic growth
Which best defines utility?
a) The utilization of economic resources by producers when engaging in
production
b) The satisfaction or pleasure obtained from producing a good or service
c) The utilization of economic resources by consumers when engaging in
consumption
d) The satisfaction or pleasure obtained from consuming a good or service -
answer d) The satisfaction or pleasure obtained from consuming a good or
service
If economists examine the relationship between the price of a good and sales
of that good while ignoring other related factors, or assuming those other
factors are equal, they are using which of the following?
a) The scientific method
b) Marginal costs
c) Scarcity theory
d) Ceteris paribus - answer d) Ceteris paribus
(Limits, Alternatives,
and Choices) with
complete verified
solutions
A statement about economic behavior or the economy that enables
prediction of the probable effects of certain actions is known as a(n) ______. -
answer economic principle.
The ______ problem refers to the need to make choices because economic
wants exceed economic means. - answer economizing
A production possibilities curve (PPC) illustrates the attainable combination
______,
a) of two goods that can be produced given a limited amount of income
b) of two goods that can be produced given a specific set of resources
c) of many goods that can be produced given an unlimited amount of
resources
d) of two goods that can be produced given an unlimited amount of
resources - answer b) of two goods that can be produced given a specific set
of resources
What does every point on a budget line graph represent?
a) All combinations of goods that unattainable with a given income
b) All combinations of goods that can be purchased with a given income
,c) The maximum utility achievable at a given income
d) The minimum income required to purchase two or more goods at the
same time - answer b) All combinations of goods that can be purchased with
a given income
True or false: Economists use the terms "capital" and "money"
interchangeably. - answer False!
Which statements best describe the combinations of goods that lie on the
production possibilities curve?
a) They are attainable.
b) They are unattainable.
c) They utilize all of an economy's available resources.
d) They represent an underallocation of resources. - answer a) They are
attainable.
c) They utilize all of an economy's available resources.
Unemployment in the economy is graphically represented by ______ the
production possibilities curve.
a) a change to a new point on
b) a rightward shift of
c) a movement outside
d) points inside - answer d) points inside
______ economic resources means limited goods and services.
a) Physical
b) Tangible
c) Insatiable
d) Scarce - answer d) Scarce
, Suppose an economy produces consumer goods and capital goods. Its
current combination of production involves a higher level of capital goods
than consumer goods. Which of the following can be inferred from this
current choice on its production possibilities curve?
a) That its present choice in production may result in higher future prospects
for economic growth
b) That its present choice in production has no effect on future prospects for
economic growth
c) That its future choice in production may result in higher present prospects
for economic growth
d) That its present choice in production may result in lower future prospects
for economic growth - answer a) That its present choice in production may
result in higher future prospects for economic growth
Which best defines utility?
a) The utilization of economic resources by producers when engaging in
production
b) The satisfaction or pleasure obtained from producing a good or service
c) The utilization of economic resources by consumers when engaging in
consumption
d) The satisfaction or pleasure obtained from consuming a good or service -
answer d) The satisfaction or pleasure obtained from consuming a good or
service
If economists examine the relationship between the price of a good and sales
of that good while ignoring other related factors, or assuming those other
factors are equal, they are using which of the following?
a) The scientific method
b) Marginal costs
c) Scarcity theory
d) Ceteris paribus - answer d) Ceteris paribus
