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Cards In This Set
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1. The problem of scarce resources
a.
means that in some cities there are not enough jobs
b.
could be solved if the unemployment rate fell
c.
is that there are not enough resources to satisfy people's unlimited wants
d.
is that resources are used inefficiently
e.
can be solved by lowering taxes
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c.
is that there are not enough resources to satisfy people's unlimited wants
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Scarcity is best defined as
a.
unlimited resources
b.
a shortage -- when buyers cannot obtain the goods they want
c.
a surplus -- when sellers cannot sell the goods they produce
d.
insufficient resources to satisfy unlimited wants
e.
the private ownership of society's resources
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d.
insufficient resources to satisfy unlimited wants
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3. Which of the following statements regarding the basic economic problem of scarcity is correct?
a.
The problem only exists in countries that are not highly industrialized.
b.
The problem is likely to disappear as production increases.
c.
The problem is sure to disappear as technology improves.
d.
The problem will exist as long as resources are available in limited amounts.
e.
The problem will disappear as a person's income falls.
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d.
The problem will exist as long as resources are available in limited amounts.
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4. Economics is the study of
a.
how the human race differs from other species
b.
how individuals amass personal fortunes in the stock market
c.
how individuals and nations deal with the problem of scarcity
d.
role that money plays in the economy
e.
how goods and services are distributed throughout the world
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c.
how individuals and nations deal with the problem of scarcity
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5. A resource is something that
a.
is used to produce goods and services
b.
is provided by nature, not made by society
c.
exists in unlimited quantities
d.
must be produced by a firm
e.
consumes goods and services
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A
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6. In economics, capital is defined as
a.
natural resources, such as water, oil, and iron ore
b.
the natural, unskilled abilities of people
c.
human creations used in the production process
d.
money and other financial assets
e.
the willingness of business owners to take risks
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C
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7. Which of the following would an economist classify as capital?
a.
100 shares of Microsoft stock
b.
a $50 bill
c.
a credit card
d.
a lawyer's personal computer
e.
a bauxite mine in Jamaica
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D
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8. Economists classify all of the following as capital, except one. Which one is not capital?
a.
a $20 bill in a firm's petty cash drawer
b.
the building where our economics class meets
c.
a plumber's wrench
d.
a railroad car
e.
a factory
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A
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9. The respective payments for the resources of natural resources, labor, capital, and entrepreneurial ability are
a.
interest, wages, profit, and rent
b.
profit, rent, interest, and wages
c.
rent, wages, profit, and interest
d.
interest, profit, wages, and rent
e.
rent, wages, interest, and profit
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E
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10. An entrepreneur
a.
always makes a profit
b.
generally avoids risky situations
c.
claims the residual (i.e., whatever is left over) after other resource suppliers are compensated
d.
is a parasite that benefits by not paying other resources for their services
e.
is the manager who runs an enterprise and keeps the customers happy
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C
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11. If a business produces and sells only one unit of a good, its profit would be the
a.
price received for the good
b.
price of the product minus the cost of the resources used to produce the product
c.
return paid to the firm's bank on its outstanding loans
d.
price of the product minus the wages paid for the labor used to produce it
e.
wages paid for the labor used to produce the product minus the price
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B
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12. Resources are divided into the following broad categories:
a.
people, money, and machines
b.
saving, spending, investment, and capital
c.
human, technological, and government
d.
natural resources, labor, capital, and entrepreneurial ability
e.
free, scarce, abundant, and unlimited
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D
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13. "Natural resources" refers
a.
bodies of water
b.
trees
c.
oil reserves
d.
minerals
e.
All of the answers are correct.
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E
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14. Goods and services are exchanged in
a.
product markets
b.
resource markets
c.
inventory markets
d.
classified markets
e.
government markets
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A
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15. Which of the four types of decision makers in the U.S. economy plays the largest role?
a.
U.S. firms and government because they produce the products that households consume
b.
U.S. households because they supply goods to the product markets and are demanders in resource markets
c.
foreign households, firms, and governments because they greatly outnumber those of the United States
d.
U.S. firms and government because they create employment for domestic households and produce goods and services
e.
U.S. households, as buyers in product markets and sellers in resource markets
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E
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