1. The English word that comes from the Greek word for “one who manages a household” is
a.
market.
b.
consumer.
c.
producer.
d.
economy.
2. The word “economy” comes from the Greek word oikonomos, which means
a.
b.
c.
d.
3. Resources are
a.
scarce for households but plentiful for economies.
b.
plentiful for households but scarce for economies.
c.
scarce for households and scarce for economies.
d.
plentiful for households and plentiful for economies.
4. In considering how to allocate its scarce resources among its various members, a household considers
a.
each member’s abilities.
b.
each member’s efforts.
c.
each member’s desires.
d.
All of the above are correct.
5. Fundamentally, economics deals with
a.
scarcity.
b.
money.
c.
poverty.
d.
banking.
6. Which of the following is correct?
a.
The word economy comes from the Greek word for “rational thinker.”
b.
Economists study the management of scarce resources.
c.
Because economists believe that people pursue their best interests, they are not interested in how people
interact.
d.
All of the above are correct.
7. The overriding reason why households and societies face many decisions is that
a.
resources are scarce.
b.
goods and services are not scarce.
c.
incomes fluctuate with business cycles.
d.
people, by nature, tend to disagree.
8. A society allocates its scarce resources to various uses. These scarce resources include
a.
land.
b.
people.
c.
machines.
d.
All of the above are correct.
9. The phenomenon of scarcity stems from the fact that
a.
most economies’ production methods are not very good.
b.
in most economies, wealthy people consume disproportionate quantities of goods and services.
c.
governments restrict production of too many goods and services.
d.
resources are limited.
10. Approximately what percentage of the world’s economies experience scarcity?
a.
10%
b.
40%
c.
85%
d.
100%
11. When a society cannot produce all the goods and services people wish to have, the economy is experiencing
a.
scarcity.
b.
surpluses.
c.
inefficiencies.
d.
inequalities.
12. Which of the following products would be considered scarce?
a.
bread
b.
baseballs autographed by Babe Ruth
c.
motorcycles
d.
All of the above are correct.
13. In the broadest sense, economics is the study of
a.
production methods.
b.
how society manages its scarce resources.
c.
how households decide who performs which tasks.
d.
the interaction of business and government.
14. The study of how society manages its scarce resources is most closely associated with which field of study?
a.
environmental studies
b.
economics
c.
management
d.
accounting
15. In most societies, resources are allocated by
a.
a single central planner.
b.
a small number of central planners.
c.
those firms that use resources to provide goods and services.
d.
the combined actions of millions of households and firms.
16. Coal is considered to be a non-renewable energy source. Which of the following statements is correct?
a.
Coal is an unlimited resource.
b.
Coal is a scarce resource.
c.
Coal is a non-scarce resource.
d.
Coal is not a resource.
17. Which of the following is not an example of scarcity?
a.
Only some people can afford to buy a BMW automobile.
b.
Every individual in society cannot attain the highest standard of living to which he or she might aspire.
c.
Miranda has more oranges in her orchard than she will ever use.
d.
Each member of a household cannot get everything he or she wants.
18. Economics is the study of how society manages its
a.
limited wants and unlimited resources.
b.
unlimited wants and unlimited resources.
c.
limited wants and limited resources.
d.
unlimited wants and limited resources.
19. Which of the following is a decision that economists study?
a.
how much people work
b.
what people buy
c.
how much money people save
d.
All of the above are correct.
20. Which of the following is an example of something economists study?
a.
Mitch chooses to work overtime to earn extra income for his family.
b.
Megan sells her physics textbook from last semester to her roommate for half the price of a new textbook.
c.
The unemployment rate in the United States has fallen by two percentage points in the last few years.
d.
All of the above are correct.
21. What term refers to the idea that society has limited resources and therefore cannot produce all the goods and services
people wish to have?
a.
inefficiency
b.
inequality
c.
scarcity
d.
market failure
22. Which of the following is a subject that economists study?
a.
the growth in average income
b.
the fraction of the population that cannot find work
c.
the rate at which prices are rising
d.
All of the above are correct.
23. A variety of fuels can be used to generate electricity. Considering only the availability of the fuel and not the cost of
converting it into electricity, which of the following fuels is most scarce?
a.
wind power
b.
solar energy
c.
fossil fuel
d.
hydro-power
24. Which of the following is not subject to scarcity?
a.
water
b.
steel
c.
diamonds
d.
none of the above