chapter 1 Flashcards
1) Which of the following is the best definition of economics?
A) the study of how a provincial government allocates tax dollars
B) the study of how consumers spend their income
C) the study of how producers decide what inputs to hire and what outputs to produce
D) the study of how individuals, businesses, governments, and entire societies make choices as they cope with scarcity and the incentives that influence and reconcile those choices
E) the study of how consumers and producers meet each other at the market
D
1) Which of the following is a microeconomic topic?
A) the reasons why a consumer buys less honey
B) the reasons why the average price level in a country falls
C) the cause of increasing unemployment
D) the effect of the government budget deficit on inflation
E) the reasons why the labour force in a country decreases
A
1) The study of how wages are set for New Brunswick teachers is classified as
A) a macroeconomic topic. B) a microeconomic topic. C) economics of social interest. D) economics of private interest. E) normative economics.
B
15) The fact that human wants cannot be fully satisfied with available resources is called the problem of A) opportunity cost. B) scarcity. C) normative economics. D) marginal cost. E) the big tradeoff.
B
16) The problem of scarcity exists
A) only in economies that lack incentives.
B) only in economies that have incentives.
C) in all economies.
D) only when people are unemployed.
E) now but will be eliminated with economic growth.
C
17) The inescapable economic fact is that
A) there are unlimited wants and limited resources.
B) there are unlimited resources, and we just have to figure out how to allocate them.
C) capitalists are always exploiting the workers.
D) unions are always exploiting firms.
E) capitalists and unions cannot work together.
A
18) An incentive ________.
A) could be a reward but could not be a penalty
B) could be a penalty but could not be a reward
C) could be either a reward or a penalty
D) is the opposite of a tradeoff
E) occurs in the macroeconomy but not in the microeconomy
C
19) Scarcity confronts \_\_\_\_\_\_\_\_. A) neither the poor nor the rich B) the rich but not the poor C) the poor but not the rich D) the rich and the poor E) families with incomes less than $25,000 a year
D
1) The two big economic questions
A) involve self-interest only.
B) involve only social interest.
C) involve neither self-interest nor social interest.
D) do not arise from scarcity.
E) involve both self-interest and social interest.
E
2) The two big economic questions
A) summarize the scope of economics.
B) are “what goods and services are produced?” and “how are goods and services produced?”
C) have nothing to do with goods and services.
D) do not consider for whom goods and services are produced.
E) have nothing to do with the way goods and services are produced.
A
3) The two big economic questions include all of the following except
A) what to produce.
B) why to produce.
C) how to produce.
D) for whom to produce.
E) can choices made in the pursuit of self-interest also promote the social interest.
B
4) When a firm decides to produce more hybrid cars and fewer gas guzzlers, it is answering the \_\_\_\_\_\_\_\_ question. A) "how" B) "what" C) "who" D) "where" E) "when"
B
5) When a textile firm decides to produce more silk fabric and less cotton fabric, it is answering the \_\_\_\_\_\_\_\_ question. A) "who" B) "how" C) "what" D) "where" E) "when"
C
6) When a farmer decides to harvest tomatoes using machines instead of migrant workers, the farmer is answering the \_\_\_\_\_\_\_\_ question. A) "what" B) "how" C) "who" D) "where" E) "when"
B
