ECON 201 ECON201 Introduction to Economics and Scarcity Quiz Answers – Online Homework Help

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Introduction to Economics and Scarcity Quiz

1. The definition of economics is a(n): Choose the BEST answer.

– Social science that examines how people make decisions in the face of scarcity.

– Physical science that examines how people choose among the alternatives available to them.

– Alternative science that examines how people choose among the alternatives available to them.

2. In economics, scarcity means: Choose ALL that apply.

– There are only 24 hours in a day.

– Reasonable people limit their wants to what is available.

– Human wants for goods and services exceed what is available.

3. Why is there scarcity? Choose the BEST answer.

– Because human wants are limited.

– Because the opportunity set determines this.

– Because theory dictates it.

– Because our unlimited wants exceed our limited resources

4. Macroeconomics includes the study of: Choose ALL that apply.

– Consumer demand for electronics.

– Inflation.

– The unemployment rate.

– The balance of trade.

5. One of the most important concepts in all of economics is opportunity cost. Identify the statements that help define this concept. Choose the BEST answer.

– Opportunity cost is the value of the best alternative forgone in making a choice.

– Opportunity cost is the consumer’s perception of value for something. It is the amount you believe something is worth and are willing to pay.

– Opportunity cost is the price of something. It is the same thing as purchase price.

6. Choose the BEST answer.

– The opportunity cost of any choice is best described as:

– The value of the best alternative that had to be given up in making that choice.

– The cost of some other item that you could have purchased.

– A measure of how scarce an item is.

– The sum of all the alternatives given up in making a particular decision.

7. A student has only a few hours to prepare for two different exams this afternoon. The table below shows alternative possible exam scores with three alternative uses of the student’s time. The opportunity cost of scoring a 94 on the economics exam rather than a 77 is: Choose the BEST answer.

Possibility A Economics History

I 94 76

II 87 84

III 77 91

– 17 points on the history exam.

– 15 points on the history exam.

– 14 points on the history exam.

– 8 points on the history exam.

8. A student has only a few hours to prepare for two different exams tomorrow morning. The table below shows alternative possible exam outcomes with three alternative uses of the student’s time. The opportunity cost of scoring an 84 on the history exam rather than 76 is: Choose the BEST answer

Possibility A Economics History

I 94 76

II 87 84

III 77 91

– 8 points on the history exam.

– 7 points on the economics exam.

– 12 points on the economics exam.

– 10 points on the economics exam.

9. The maximum combinations of two outputs that could be produced with available resources are represented on a graph by which of the following? Choose the BEST answer.

– Opportunity cost

– Gross Domestic Product

– Maximization of resources

– Production possibility frontier

– Production efficiency curve

10. A Production Possibility Curve demonstrates: Choose ALL that apply. Partially correct

– All combinations of two goods that are efficient to produce.

– The efficiency of labor, investment in capital, and the reduction of scarcity.

– The law of diminishing returns.

11. The production possibilities curve describes the: Choose ALL that apply.

– Mix of goods that are economically most efficient to produce.

– Mix of goods that society is most willing to purchase.

– Opportunity cost of producing more of one good in terms of the other good.

12. The production possibilities schedule below shows the hypothetical relationship between the production of industrial robots and food. If an economy produces 2 units of industrial robots and 60 units of food, the economy is likely experiencing: Choose the BEST answer.

Products A B C D E

Industrial Robots 0 1 2 3 4

Food 100 90 70 40 0

– Underemployment of one or more of its resources

– An increase in the opportunity cost of food

– A reduction in the amount of capital stock

13. Why do opportunity costs increase more as the production of a good increases? Choose the BEST answer.

– It is because there is less and less efficiency in producing

– It is because the price of alternative goods rises.

– It is because of environmental restraints and limitations.

14. The steeper the slope on the production possibilities curve, the ________. Choose the BEST answer.

– Cheaper the price

– Greater the opportunity cost

– Smaller the opportunity cost

15. An economy operating INSIDE its production possibilities curve: Choose the BEST answer.

– implies that the economy is operating at full capacity

– implies the economy is operating inefficiently

– explains that an economy is producing more than it can use

16. Specialization among many workers is preferred over each worker producing the entire good alone because it results in: Choose the BEST answer.

– More people employed.

– Greater production and lower costs.

– Greater job satisfaction.

– empowered employees.

17. An increase in the supply of labor in an economy can be described in a production possibilities frontier as a(n): Choose the BEST answer.

– Outward shift in the curve because more goods can now be produced with the additional workers.

– Movement along the original curve toward greater production of goods that consumers like to purchase.

– Location inside the original curve as a result of the new additions to the work force.

18. If an economy devotes more resources to producing capital goods and fewer resources to producing consumer goods, the economy will: Choose ALL that apply.

– Experience diminishing marginal returns from producing more capital goods.

– Have higher opportunity costs of producing additional consumer goods.

– Have lower opportunity costs of producing additional consumer goods.

19. Which of the following best characterizes the circular flow of income? Choose the BEST answer.

– Businesses buy resources from the government, and households buy goods and services from -businesses.

– Households buy factors of production from businesses, and businesses buy goods and services from households.

– Businesses buy resources from households, and households use their income from the sale of resources to buy goods and services from businesses.

20. An economic model: Choose ALL that apply.

– are used to test theories.

– is a more applied representation of the real world than a theory.

– provides detailed and accurate representations of the real world.

21. Marginal thinking is best demonstrated by: Choose the BEST answer.

– choosing to spend one more hour studying economics because you think the improvement in your score on the next quiz will be worth the sacrifice of time. 

– deciding to never purchase a coat made with animal skins or furs.

– measuring all of the costs of a meal against all of the benefits.

22. Most consumer and producer choices involve ________, which involve comparing the benefits and costs of choosing a little more or a little less of a good. Choose the BEST answer.

– Expectations

– Marginal decisions

– All or nothing decisions

23. Which of the following is NOT based on the assumption of rationality? Choose the BEST answer.

– Businesses choose to minimize costs of production.

– Texans like spicy food more than New Englanders do.

– Consumers want to maximize their level of satisfaction.

24. When economists say that a consumer maximizes their satisfaction, it implies that they are: Choose the BEST answer.

– acting irrationally.

– pursuing their self-interest.

– behaving selfishly.

25. “Low income people receive less education than high-income people,” is a ________.Choose the BEST answer.

– Factual opinion

– Normative statement

– Positive statement

26. Which of the following are normative statements? Choose ALL that apply.

– Access to health care should not be limited by income

– efforts to improve the environment tend to reduce production and employment

– the fed government does not spend enough on children.