Chapter 1 Econ

According to this textbook, an example of a nonrenewable resource is a. oil b. timber c. crops d. animals

A

Economists believe that people respond to a. incentives b. politicians c. theories d. unlimited wants

A

High school athletes who choose not to attend college but instead select professional sports a. have weighed the costs and benefits b. don't realize what a college education is worth c. can't play forever and are making a poor decision d. should attend college first, then play professional sports

A

If you are making decisions at the margin, you are a. selecting either all or nothing at all b. comparing the extra benefit to the extra cost c. confused about what to do d. all of the above

B

A production possibilities frontier shows a. all the possible production of one particular good b. all possible combinations of two goods an economy can produce c. all possible combinations of all the goods that an economy can produce d. all the possible combinations of four goods an economy can produce

B

As the opportunity cost of a decision increases, a person will be a. more likely to make such a decision b. less likely to make such a decision c. unaffected d. Cannot predict

B

Economics would not exist if it were not for a. incentives b. scarcity c. money d. mathematics

B

Economists believe that the British troops probably wore bright red uniforms due to the important economic concept of a. unintended consequences b. opportunity cost c. scarcity d. marginal utility

B

Scarcity exists because a. resources are limited and wants are limited b. resources are limited and wants are unlimited c. wants are unlimited and resources are unlimited d. wants can be satisfied and resources are unlimited

B

Scarcity exists when a. things are rare b. there is less of a good than people would like to have c. there is an unlimited supply of a good d. prices change

B

The marginal cost of something is a. the opportunity cost minus the actual cost b. the cost to produce one additional unit c. never greater than the marginal benefit d. an intangible resource

B

The opportunity cost of something is a. the dollar value of the item b. what you give up to get the item c. more costly to the poor d. less than the dollar value of the item

B

When a society spends money on national defense, there is a. no trade-off, since everyone benefits from national defense b. a trade-off, since that money cannot be used for a school or a bridge c. no trade-off, since it is not a personal decision d. a trade-off during peacetime, but not during wartime

B

Which of the following is a renewable resource a. natural gas b. timber c. coal d. oil

B

Rationing exists because of a. a surplus of products b. price c. incentives d. scarcity

D

As the opportunity cost of college increases compared to the benefits, a person is a. unaffected by the change b. more likely to attend college c. less likely to attend college d. cannot predict

C

If you parents offer you cash for every A on your report card, that is an example of a. marginal cost b. a trade-off c. an incentive d. a bribe

C

Labor refers to a. foreign workers b. physical talents c. physical and mental talents d. goods that can be used as resources for production

C

Opportunity cost is most similar to a. all the alternatives forfeited b. your choice c. a trade-off d. the dollar value given up

C

Things that can be felt or touched are a. intangible b. renewable c. tangible d. real

C

To an economist, capital refers to a. new business opportunities b. resources found in nature c. machinery and tools d. money

C

Animals are classified as which of the following factors of production? a. capital b. entrepreneurship c. labor d. land

D

Another word for marginal is a. modified b. edge c. summarized d. additional

D

In economics the opportunity cost of something is a. how much it adds up to in dollars and cents b. a bargain if it is on sale c. part of your budget d. what you give up to get the item

D

Incentives include a. grades b. speeding tickets c. taxes d. all of the above

D

Which economic concept explains why Kobe Bryant and LeBron James chose to go directly into professional basketball rather than college? a. marginal costs b. production possibilities c. unintended effects d. opportunity cost

D

Which of the following groups is faced with scarcity a. businesses b. individuals c. society d. All of the above

D

Which of the following is an example of an incentive? a. grades b. money c. a promotion d. all of the above

D

Which of the following is scarce? a. cars b. clothing c. resources d. all of the above

D

Opportunity cost could be described as a. all the alternatives you consider b. your first choice c. the dollar price paid for your selection d. your second choice

d