ECON2100 Chapter 1 & 2 Quiz

Of the three major economic questions, which of the following is the best example of a "How?" question?

Should we collect tolls on turnpikes using human toll collectors or mechanized toll machines?

Which of the following is the best example of a "What?" question?

Should we make faster microprocessors or pest-resistant corn?

The difference between consumption and capital goods is that

capital goods are used to produce additional goods while consumption goods are not.

Making choices on the margin means

comparing all relevant alternatives systematically and incrementally.

Items that are purchased by individuals for their own enjoyment are called

consumption goods and services.

The study of economics is best described as a study of

coping with scarcity, and choices made as a result of scarcity in a society.

Most of the world's population lives in

developing economies.

The circular flow model shows the flow of

expenditure and income throughout the economy.

What two groups of decision makers are represented in the basic circular flow model?

households and firms

Scarcity exists because

human wants exceed the resources available to satisfy them

Rational choice

is a choice that uses the available resources to best achieve the objective of the person making the choice.

As the circular flow model points out, a choice that households make is how

many goods and services are purchased.

The income paid for the use of land is called

rent.

Compared to the world, the rate of U.S. population growth is

slower than in the world as a whole.

Which of the following is NOT considered one of the factors of production?

technology

Of the following, the country with the highest average income per day in the world is

the United States.

An opportunity cost is

the benefits of the highest-valued alternative forgone.

Choices that are best for the society as a whole are choices in pursuit of

the social interest.

The primary focus of microeconomics is

to examine the behavior and operation of the individual units or sectors that make up the economy.

The benefit from a good or service that you purchase is measured by

what you are willing to give up to obtain the good or service.