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Business Eco

In:

Submitted By libra1010
Words 19348
Pages 78
Chapter 1—The Role and Method of Economics

MULTIPLE CHOICE

1. What is economics most concerned with?
a.|how to reduce inflation|
b.|how to profit from trading in the stock market|
c.|studying how we allocate scarce resources to satisfy unlimited wants|
d.|government taxation and spending|

ANS: C
PTS: 1
DIF: Easy
REF: p. 1
BLM: Knowledge

2. What is the central concern of economics?
a.|how to regulate the supply of money|
b.|how to reduce the wants of individuals, businesses, and government|
c.|how to find more resources to satisfy everyone's wants|
d.|how to make the best use of scarce resources to satisfy our unlimited wants|

ANS: D
PTS: 1
DIF: Easy
REF: p. 1
BLM: Knowledge

3. Why is there scarcity?
a.|because average costs may exceed average benefits|
b.|because human wants are limited|
c.|because theory dictates it|
d.|because our unlimited wants exceed our limited resources|

ANS: D
PTS: 1
DIF: Easy
REF: p. 1
BLM: Knowledge

4. Why does the problem of scarcity exist?
a.|because resources are limited relative to wants|
b.|because governments fail to intervene in the market place|
c.|because resources are unlimited relative to wants|
d.|because the world has many poor people|

ANS: A
PTS: 1
DIF: Easy
REF: p. 1
BLM: Knowledge

5. What does scarcity result from?
a.|government decision making|
b.|positive economics|
c.|wants that exceed the resources necessary to provide them|
d.|inappropriate normative judgments|

ANS: C
PTS: 1
DIF: Moderate
REF: p. 1
BLM: Comprehension

6. What causes scarcity?
a.|the allocation of goods by prices|
b.|specialization and division of labour|
c.|unlimited wants and limited resources|
d.|the market mechanism|

ANS: C
PTS: 1
DIF: Easy
REF: p. 1
BLM: Knowledge

7. What does economics primarily explore?
a.|how the government allocates its budget among

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