CHAPTER 1 ECONOMICS - WHAT IS ECONOMICS (True & False/ Multiple Choice)
(T/F) Both goods and services are counted as wealth.
a. False.
When a nation's total output increases over time, the nation is experiencing...
a. A decrease in gross domestic product.
Which of the following would result in a change in the production possibilities frontier in the mythical country Alpha?
a. An influx of immigrants from other countries.
When a business needs to decide whether a certain action is worth the cost, the most helpful analysis would be a(n)...
a. Cost-benefit analysis.
A car is an example of a...
a. Durable good.
Which of the factors of production involves taking risks and combining resources to produce a good or service?
a. Entrepreneurs.
The study of economics involves...
a. Explaining how people deal with scarcity.
(T/F) Economic growth causes the production possibilities frontier to contract.
a. False.
(T/F) Economic growth usually can be achieved without investing in new resources.
a. False.
(T/F) In all societies, the government decides what to produce.
a. False.
(T/F) Japan, with an aging population, has had difficulty replacing people with machines.
a. False.
Division of labor is practiced because...
a. It increases efficiency by ensuring that workers become good at specific tasks.
In the mythical country Alpha, an entrepreneur has introducedn a new technology that makes manufacturing twice as efficient as before. How is this likely to affect the production possibilities frontier?
a. It would expand the frontier.
A can of soup is an example of a...
a. Non-durable good.
The amount of output in a specific amount of time with a given amount of resources is referred to as...
a. Productivity.
Opportunity cost refers to...
a. The value of the next best alternative.
Consumers are powerful because...
a. They drive decisions about what to produce.
When deciding how to use resources, you need to evaluate the costs and benefits of each choice to decide which meets your criteria. These are called...
a. Trade-offs.
(T/F) Separation of tasks to be performed by different workers is division of labor.
a. True.
Which of the following helps determine something's value?
a. Utility and scarcity.
Societies are faced with which three basic questions about production of goods?
a. What, how, and for whom.
A nation's wealth is determined by its...
a. accumulation of all tangible products.
(T/F) People's needs are limited.
a. False.
(T/F) People's skills, abilities, health, knowledge, and motivation all add up to entrepreneurship.
a. False.
The most comprehensive measure of a nation's wealth is provided by its...
a. Gross domestic product.
Paradox of value refers to the...
a. High value of a nonessential item and the low value of an essential item.
Which of the following statements best describes the purpose of the production possibilities curve?
a. It identifies all possible combinations of goods and services an economy can produce.
(T/F) Economic growth is an increase in a nation's output of goods and services over time.
a. True.
A nation's wealth is made up of...
a. All tangible items.
The efficient use of scarce resources leads to an increase in...
a. Productivity.
Consumers are expected to read the full information about a product before making a purchase. This is an example of a consumer's...
a. Responsibilities.
Consumers waiting in long lines for a new product is an example of...
a. Scarcity.
Which of the following descriptions best explains the meaning of opportunity cost?
a. The cost of choosing one alternative over another.
Dave gets a job at a grocery store, which pays him an hourly wage in exchange for his labor. Dave is participating in...
a. The factor market.
(T/F) Scarcity is an economic problem with which all societies are faced.
a. True.
