Econ

C h a p t e r

1

5) A) B) C) D)

WHAT IS ECONOMICS?

Definition of Economics

Topic: Incentives Skill: Recognition

Topic: Definition of Economics Skill: Conceptual

1) A) B) C) D)

An incentive could be a reward but could not be a penalty. could be a penalty but could not be a reward. could be either a reward or a penalty. is the opposite of a tradeoff.

Scarcity requires that people must cooperate. compete. trade. make choices.

Answer: D Topic: Definition of Economics Skill: Conceptual

Answer: C Topic: Definition of Economics Skill: Recognition

2) A) B) C) D)

The most fundamental economic problem is security. scarcity. health. the fact the United States buys more goods from foreigners than we sell to foreigners.

6) A) B) C) D)

As an economic concept, scarcity applies to both money and time. money but not time. time but not money. neither time nor money.

Answer: A Topic: Definition of Economics Skill: Conceptual

Answer: B Topic: Definition of Economics Skill: Conceptual

7) A) B) C) D)

3) A) B) C) D)

Economics is best defined as the study of how people, businesses, governments, and societies choose abundance over scarcity. make choices to cope with scarcity. use their infinite resources. attain wealth.

Which is the most accurate definition of the study of economics? Economics is the study of the distribution of surplus goods to those in need. affluence in a morally bankrupt world. the choices we make because of scarcity. ways to reduce wants to eliminate the problem of scarcity.

Answer: C Topic: Microeconomics and Macroeconomics Skill: Recognition

Answer: B Topic: Definition of Economics Skill: Conceptual

8) A) B) C) D)

4) A) B) C) D)

Economists point out that scarcity confronts neither the poor nor the rich. the poor but not the rich. the rich but not the poor. both the poor and the rich.

Answer: D

Which of the following is a macroeconomic topic? The reasons for a rise in the price of orange...