Question 1

Which of the following is a microeconomic topic?
A)Northwest Airlines analyzes the benefits of adding one more flight to Salt Lake City.
B)Unemployment soars as taxes increase.
C)The government leaves interest rates unchanged as the economy improves.
D)Germany's government increases taxes to avoid a budget deficit.
E)Chinese economic growth slows.

Accepted Answer

The analysis of Northwest Airlines adding one more flight is a specific, individual decision that pertains to microeconomics. The other options are more macroeconomic topics.

Question 2

Scarcity
A)is the inability to satisfy all our wants.
B)leads to higher prices.
C)applies only to people living in poverty.
D)is not something that affects very rich people.
E)used to exist everywhere but has been eliminated in advanced economies.

Accepted Answer

Scarcity refers to the idea that our wants and needs are unlimited, while the resources needed to fulfill those wants and needs are limited. Therefore, scarcity leads to choices and trade-offs, as we must prioritize and allocate our resources in the best possible way. This often results in higher prices due to the limited supply compared to the demand. Scarcity is not limited to people living in poverty, and it continues to exist even in advanced economies where there may be abundance in some areas but scarcity in others. Very rich people are not exempt from scarcity, as they too face trade-offs and choices in how to allocate their resources.

Question 3

Scarcity requires that we
A)produce efficiently.
B)learn to limit our wants.
C)have the most rapid economic growth possible.
D)have unlimited resources.
E)make choices about what goods and services to produce.

Accepted Answer

E

Question 4

Which of the following statements best describes the study of economics? Economics studies how
A)to organize production so that scarcity does not occur.
B)firms make profits.
C)we make choices in the face of scarcity.
D)to create incentives so that scarcity does not exist.
E)businesses reach decisions.

Accepted Answer

Economics is the study of how individuals and society make choices under conditions of scarcity. Scarcity is the fundamental concept of economics, as it means that there are limited resources to satisfy unlimited wants and needs. The study of economics helps us understand how individuals, businesses, and governments allocate resources to meet their needs and wants.

Question 5

Economics is the social science that studies
A)the real reasons people buy goods and services.
B)the psychology of individuals and businesses.
C)whether a nation has enough natural resources.
D)how people make choices to cope with scarcity.
E)how choices made in the social interest could eliminate scarcity.

Accepted Answer

Economics studies how people make choices to cope with scarcity, which is the fundamental problem of economics. The other options do not fully capture the scope of economics as a social science.

Question 6

Scarcity exists because
A)human wants exceed the resources available to satisfy them.
B)some individuals have low income.
C)the costs of production are high.
D)some people make bad economic decisions.
E)people take too much leisure time.

Accepted Answer

Scarcity exists because human wants exceed the resources available to satisfy them. This means that there are limited resources available to fulfill the unlimited wants and needs of individuals and society as a whole. As a result, choices must be made about what to produce, how to produce it, and for whom to produce it.

Question 7

Which of the following statements best describes the study of economics? Economics studies how
A)to organize production so that scarcity does not occur.
B)firms make profits.
C)we make choices in the face of scarcity.
D)to create incentives so that scarcity does not exist.
E)businesses reach decisions.

Accepted Answer

The study of economics is essentially the study of how individuals and societies make choices in the face of scarcity. Scarcity refers to the limited nature of society's resources, including natural resources, labor, and capital. Because these resources are limited, individuals and society must make choices about how to allocate them among competing uses. This is the central problem of economics.

Question 8

Which of the following is a microeconomic topic?
I. K-Mart's decision to close stores that are not making a profit
Ii. Home Depot's choice to hire more full-time employees because its sales increased
Iii. Delta Airlines changes its fares
A)i only
B)ii only
C)i and iii
D)ii and iii
E)i, ii, and iii

Accepted Answer

All three scenarios involve decisions made by individual businesses, which is a focus of microeconomics. Microeconomics studies the behavior of individuals and firms in making decisions regarding the allocation of scarce resources.

Question 9

Which of the following is a microeconomic issue?
A)The price of gasoline increases in the United States this year.
B)The Brazilian economy experiences rapid economic growth.
C)The unemployment rate soars in Spain.
D)Inflation skyrockets in Russia.
E)The U.S. government cuts taxes to combat a recession.

Accepted Answer

The price of gasoline is a specific market issue that is analyzed in microeconomics. The other options are more broad economic issues that are typically analyzed in macroeconomics.

Question 10

Scarcity means that
A)what we can produce with our resources is greater than our material wants.
B)resources are unlimited.
C)wants are greater than what we can produce with out resources.
D)governments must make up for shortages in resources.
E)choices made in self-interest cannot be the same as those made in the social interest.

Accepted Answer

Scarcity refers to the fact that our wants and needs exceed the resources available to satisfy them. Thus, choice C accurately reflects the definition of scarcity and is the best choice. Choices A, B, D, and E do not accurately reflect the definition of scarcity.

Question 11

Because human wants are insatiable and unlimited while available resources are limited, people are said to face the problem of
A)scarcity.
B)why to produce.
C)macroeconomics.
D)microeconomics.
E)social interest versus self-interest.

Accepted Answer

Scarcity refers to the fundamental economic problem of having seemingly unlimited human wants and needs in a world of limited resources. This creates a situation where choices must be made as to how to allocate resources efficiently in order to fulfill as many needs and wants as possible.

Question 12

What is the reason that all economic issues and problems occur?
A)All nations use some form of money to buy and sell goods and services.
B)Humans are always wasteful and inefficient in production and consumption.
C)Powerful governments are able to control production and consumption.
D)Human wants exceed the resources available to satisfy them.
E)People seek only their own self-interest.

Accepted Answer

Economic issues and problems occur because human wants and desires for goods and services exceed the resources available to satisfy them. This scarcity leads to competition for resources and the need to make choices about how to allocate them. This is the fundamental problem of economics. The other options, such as the use of money, inefficiency in production and consumption, powerful governments, and self-interest, are all factors that can affect economic outcomes, but they are not the root cause of economic issues and problems.

Question 13

The study of economics is best described as a study of
A)the factors that influence the stock and bond markets.
B)capitalism.
C)the choices made in producing goods and services.
D)coping with scarcity, and choices made as a result of scarcity in a society.
E)how people earn a living.

Accepted Answer

Economics is the study of scarcity and how society copes with it through the production, distribution, and consumption of goods and services. It involves analyzing choices made by individuals, businesses, and governments in allocating limited resources to satisfy unlimited wants and needs.

Question 14

Which of the following best defines economics?
A)Economics teaches how to limit our wants.
B)Economics studies how to choose the best alternative when coping with scarcity.
C)Economics helps you earn as much money as possible.
D)Economics analyzes all aspects of human behavior in general.
E)Economics is concerned with prices and quantities of goods and services, both at the individual level and at the industry level.

Accepted Answer

Economics is the study of how individuals, businesses, governments, and societies make choices about how to allocate scarce resources. It is concerned with understanding how people make decisions when faced with limited resources, and how these decisions affect the production, distribution, and consumption of goods and services. Therefore, option B is the best choice as it defines economics as the study of decision-making under conditions of scarcity.

Question 15

Scarcity means we must
A)consume less.
B)produce less.
C)make choices.
D)earn more.
E)work more.

Accepted Answer

When resources are scarce, we must make choices about how to allocate them. This might mean choosing between different goods or services, deciding how much to produce, or determining how much to consume. Earning more or working more may not necessarily help to alleviate scarcity if the resources themselves are limited.

Question 16

Scarcity forces people to
A)choose among available alternatives.
B)cheat and steal.
C)be unwilling to help others.
D)live at a low standard of living.
E)consume as much as they can as quickly as they can.

Accepted Answer

Scarcity creates a situation where there are limited resources to fulfill unlimited wants and needs. This means that individuals must make choices about how they allocate their resources in order to meet their most important needs and desires. This is the fundamental concept of economics and the reason why people must choose among available alternatives when facing scarcity. Cheating, stealing, being unwilling to help others, and consuming as much as they can as quickly as they can are not sustainable or effective solutions to scarcity. Living at a low standard of living may be a consequence of scarcity, but it is not a necessary outcome if individuals make wise choices about how they allocate their resources.

Question 17

Economics is best defined as the social science that studies
A)how a person can get everything he or she wants.
B)the reason money exists.
C)the way to eliminate choices in our decisions.
D)the choices that societies, and the people and institutions that make up societies, make in dealing with the issue of scarcity.
E)how choices made in the social interest must conflict with choices made in the self-interest.

Accepted Answer

Economics is the study of how people, institutions and societies make choices in the face of scarcity. It involves analyzing and understanding how resources are allocated among different uses in order to satisfy the unlimited human wants and needs, given the limited resources available. Economics focuses on a wide range of topics such as market behavior, pricing and supply and demand, resource allocation, trade and exchange, and economic growth and development, among others.

Question 18

The primary focus of microeconomics is
A)to examine the operation of the entire (aggregate)economy.
B)to examine the behavior and operation of the individual units or sectors that make up the economy.
C)our government's monetary policy.
D)the levels of employment and inflation.
E)to study how we managed to eliminate scarcity.

Accepted Answer

Microeconomics focuses on studying the behavior and operation of individual units or sectors that make up the economy, such as households, firms, and markets. It looks at how they make decisions regarding production, consumption, and pricing based on scarcity and resource allocation. It does not concern itself with broader macroeconomic issues such as monetary policy, inflation, or overall employment levels.

Question 19

Which of the following is a microeconomic issue?
A)Growth in the U.S. economy slowed.
B)Increased federal government expenditures have lowered the unemployment rate.
C)The inflation rate fell this year.
D)The quantity of wheat grown in the United States increases this year.
E)The U.S. government cuts taxes to combat a recession.

Accepted Answer

The quantity of wheat grown in the United States increasing is a microeconomic issue because it concerns the production and supply of a specific good.

Question 20

Microeconomics includes the study of the
A)aggregate effects on the national economy.
B)recessions and inflation in the global economy.
C)choices made by individuals and businesses.
D)reasons why the government changes interest rates.
E)nationwide unemployment rate.

Accepted Answer

Microeconomics focuses on the behavior and decision-making of individual consumers, households, and businesses. It examines the factors that influence their choices, such as supply and demand, market competition, pricing strategies, and decision-making under uncertainty. It does not focus on national or global economic trends, government policies, or macroeconomic issues such as recession and inflation.

Quiz 1: Getting Started

Which of the following is a microeconomic topic?

Scarcity

Scarcity requires that we

Which of the following statements best describes the study of economics? Economics studies how

Economics is the social science that studies

Scarcity exists because

Which of the following statements best describes the study of economics? Economics studies how

Which of the following is a microeconomic topic? I. K-Mart's decision to close stores that are not making a profit Ii. Home Depot's choice to hire more full-time employees because its sales increased Iii. Delta Airlines changes its fares

Which of the following is a microeconomic issue?

Scarcity means that

Because human wants are insatiable and unlimited while available resources are limited, people are said to face the problem of

What is the reason that all economic issues and problems occur?

The study of economics is best described as a study of

Which of the following best defines economics?

Scarcity means we must

Scarcity forces people to

Economics is best defined as the social science that studies

The primary focus of microeconomics is

Which of the following is a microeconomic issue?

Microeconomics includes the study of the