Question 1

Which of the following is an example of scarcity?
A) Adam has more than enough food to eat each day.
B) Benito is wealthy so he has everything he could ever want.
C) Camden would like to have more designer clothes than he can afford.
D) Dennis takes as many vacations as he would like since he won the lottery.

Accepted Answer

Scarcity refers to the concept that there are limited resources available to meet unlimited wants and needs. Camden wanting more designer clothes than he can afford exemplifies scarcity as there is a limited budget preventing him from obtaining all that he desires. The other options provided do not exemplify scarcity as Adam has more than enough resources to meet his needs, Benito has all that he desires due to his wealth, and Dennis has unlimited vacations due to his lottery winnings.

Question 2

Which of the following is true of resources?
A) Resources are outputs from the production of goods and services.
B) A $1,000 investment is an example of a capital resource.
C) Entrepreneurship organizes resources to produce goods and services.
D) Land resources do not include water.

Accepted Answer

Entrepreneurship involves identifying and mobilizing resources (such as land, labor, and capital) to produce goods and services. Option A is incorrect because resources refer to inputs, not outputs. Option B is partially correct as investment can be a form of capital resource, but it does not provide a comprehensive understanding of all types of resources. Option D is incorrect because land resources may include water bodies, minerals, and other natural resources.

Question 3

The services of farmers are an example of:
A) capital.
B) a natural resource.
C) labor.
D) entrepreneurship.

Accepted Answer

Farmers provide labor by working on their land, planting and harvesting crops, and taking care of their livestock.

Question 4

Scarcity is a problem:
A) measured by the amount of goods available.
B) of the poor, but not the rich.
C) because human wants are unlimited while resources are limited.
D) only in industrialized economies.

Accepted Answer

Scarcity is a problem because human wants are unlimited while resources are limited. This is a fundamental economic concept that applies to all economies, not just industrialized ones. The fact that resources are scarce means that we must make choices about how to allocate them, and that there will always be trade-offs and opportunity costs. The wealthy also face scarcity in their decisions about how to allocate their resources, although their choices may be different than those of the poor.

Question 5

Relate the term scarcity to the action(s) it causes.
A) Scarcity causes developed nations to have more material goods than developing nations.
B) Scarcity causes fewer technological advances.
C) Scarcity forces people to want more material goods.
D) Scarcity forces everyone to make choices.

Accepted Answer

Scarcity forces everyone to make choices because resources are limited, and people must decide how to allocate them. This means that individuals, businesses, and governments must decide which goods and services to produce and consume, and how much of each to produce or consume. Without scarcity, there would be no need for choices to be made, since all goods and services could be produced and consumed indiscriminately.

Question 6

Wealthy families wanting finer homes and nicer vacations exemplify
A) capital.
B) production.
C) resources.
D) scarcity.

Accepted Answer

Scarcity refers to the fundamental economic problem of having seemingly unlimited human wants in a world of limited resources. The desire of wealthy families for finer homes and nicer vacations illustrates this concept, as it shows the ongoing demand for better and more resources, despite the wealth already possessed.

Question 7

When economists say scarcity, they mean:
A) there are only a limited number of consumers who would be interested in purchasing goods.
B) the human desire for goods exceeds the available supply of time, goods and resources.
C) most people in poorer countries do not have enough goods.
D) goods are so expensive that only the rich can afford it.

Accepted Answer

Scarcity refers to the situation where the resources available to us are limited, while our wants and needs are virtually unlimited. This is what creates the problem of choice in economics, as we must decide how to allocate our scarce resources among the many competing demands for goods and services. Therefore, option B is the best choice as it accurately reflects this concept.

Question 8

People are forced to make choices because of:
A) unlimited wants and unlimited resources.
B) limited wants and unlimited resources.
C) unlimited wants and limited resources.
D) limited wants and limited resources.

Accepted Answer

People are always driven by unlimited wants but the resources available to fulfill those wants are limited. Therefore, they have to make choices based on what they value the most and what they can afford. This is the concept of scarcity and it forces people to prioritize and make trade-offs. Option C correctly reflects this reality.

Question 9

Scarcity:
A) exists because resources are unlimited while human wants are limited.
B) means we are unable to have as much as we would like to have.
C) will likely be eliminated as technology continues to expand.
D) is not an issue addressed in economics.

Accepted Answer

Scarcity refers to the fact that resources (both tangible and intangible) are limited while human wants are virtually unlimited. This means that we are unable to have as much as we would like to have due to scarcity. While technology may be able to increase the efficiency of resource use, it cannot eliminate scarcity completely as there will always be a limit to available resources.

Question 10

Natural resources are:
A) not considered scarce because no one pays for them.
B) rarely used in production.
C) included in the category of resources called land.
D) available in unlimited quantities.

Accepted Answer

Natural resources are included in the category of resources called land, which also includes land itself and any improvements made to it. Natural resources are not considered unlimited, but rather are subject to depletion over time.

Question 11

An entrepreneur is a(n):
A) individual who has much education.
B) organizer who seeks profitable opportunities and is willing to accept risks.
C) business organization that uses inputs to produce output.
D) depot or warehouse for commercial products.

Accepted Answer

An entrepreneur is someone who identifies and creates profitable opportunities, often involving taking risks to start or run a business. Education is not a requirement for being an entrepreneur, nor does the term refer to a business organization or warehouse.

Question 12

Which of the following is not an example of a factor of production?
A) A forest.
B) A computer program.
C) A labor leader.
D) Dollars.

Accepted Answer

Factors of production include land, labor, capital, and entrepreneurship. A forest (land), a computer program (capital), and a labor leader (entrepreneurship/labor) are all examples of factors of production. Dollars, however, represent financial capital, not a direct factor of production, as they are used to purchase factors of production rather than being one themselves.

Question 13

Which of the following would an economist classify as capital?
A) 100 shares of Microsoft stock.
B) $50 bill.
C) credit card.
D) lawyer's personal computer.

Accepted Answer

Capital refers to physical assets used in the production of goods and services. A lawyer's personal computer is a physical asset used in their work, so it would be classified as capital. The other choices are not physical assets used in production.

Question 14

The perpetual problem in economics is:
A) our inability to work together effectively.
B) our inability to satisfy everyone's wants with the available resources.
C) likely to be solved in resource-rich countries.
D) our inability to utilize resources efficiently.

Accepted Answer

The fundamental problem in economics is scarcity, which means that there are limited resources but unlimited wants. Therefore, it is impossible to satisfy everyone's wants with the available resources, which creates the perpetual problem in economics. Choices A, C, and D are not necessarily the root cause of this problem.

Question 15

When economists say goods are scarce, they mean:
A) consumers are too poor to afford the goods and services available.
B) consumers are unwilling to buy goods unless they have very low prices.
C) goods are generally freely available from nature in most countries.
D) the desire for goods and services exceeds our ability to produce them with the limited resources available.

Accepted Answer

When economists say goods are scarce, they mean that the desire for goods and services exceeds our ability to produce them with the limited resources available. Therefore, option D is the correct choice while options A, B, and C are not accurate.

Question 16

The mental and physical capacity of workers to produce goods and services is known as:
A) labor.
B) entrepreneurship.
C) value judgment.
D) product sensitivity.

Accepted Answer

Labor refers to the mental and physical effort required to produce goods and services. It encompasses the skills, knowledge, abilities, and physical capacity of workers.

Question 17

Human wants:
A) are unfilled only in the poorer countries of the world.
B) can be completely satisfied by advancing technology.
C) can never be fully satisfied.
D) only apply to necessities.

Accepted Answer

Human wants can never be fully satisfied as they constantly change and evolve with changing lifestyles, social and cultural norms, and advancements in technology. Even when some wants are fulfilled, new ones emerge, making it a never-ending cycle.

Question 18

The finite nature of the economy's resource base:
A) will be solved if only we would learn to conserve.
B) is only a problem in developing countries.
C) will be solved as technology advances.
D) will always be with us.

Accepted Answer

The finite nature of the economy's resource base means that there is a limit to the amount of resources available, which cannot be overcome by conservation or technological advances. This limit will always exist and must be considered in economic decision-making.

Question 19

Scarcity:
A) is a problem only in industrialized economies.
B) is a condition measured by the quantity of goods available.
C) exists everywhere because human wants can never be satisfied.
D) is a problem only in poor economies.

Accepted Answer

Scarcity exists everywhere because human wants are unlimited and resources (goods) are limited. This means that people will always have to make choices about how to allocate their resources. It is not limited to industrialized or poor economies, nor is it solely measured by the quantity of goods available.

Question 20

An economics textbook is an example of:
A) capital.
B) labor.
C) a natural resource.
D) entrepreneurship.

Accepted Answer

An economics textbook is an example of capital as it is a human-made resource used to produce goods and services, specifically knowledge and education.

Quiz 1: Introducing the Economic Way of Thinking

Which of the following is an example of scarcity?

Which of the following is true of resources?

The services of farmers are an example of:

Scarcity is a problem:

Relate the term scarcity to the action(s) it causes.

Wealthy families wanting finer homes and nicer vacations exemplify

When economists say scarcity, they mean:

People are forced to make choices because of:

Scarcity:

Natural resources are:

An entrepreneur is a(n) :

Which of the following is not an example of a factor of production?

Which of the following would an economist classify as capital?

The perpetual problem in economics is:

When economists say goods are scarce, they mean:

The mental and physical capacity of workers to produce goods and services is known as:

Human wants:

The finite nature of the economy's resource base:

Scarcity:

An economics textbook is an example of: