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CHAPTER 1—WHAT IS ECONOMICS?

MULTIPLE CHOICE

1. The basic problem of economics arises when there are unlimited resources available to fulfill society's limited wants.
a.|True|
b.|False|

ANS: B PTS: 1 NAT: Financial theories, analysis, reporting, and markets
LOC: Scarcity, tradeoffs, and opportunity cost
TOP: Economics | Scarcity and Choice

2. Economics is the study of choice under conditions of
a.|demand|
b.|supply|
c.|scarcity|
d.|opportunity|
e.|abundance|

ANS: C PTS: 1 DIF: 1
NAT: Financial theories, analysis, reporting, and markets
LOC: Scarcity, tradeoffs, and opportunity cost
TOP: Economics | Scarcity and Choice

3. The study of economics would be superfluous if _____ did not exist.
a.|demand|
b.|capital|
c.|corporations|
d.|profit|
e.|scarcity|

ANS: E PTS: 1 DIF: 2
NAT: Financial theories, analysis, reporting, and markets
LOC: Scarcity, tradeoffs, and opportunity cost
TOP: Economics | Scarcity and Choice

4. Which of the following disciplines is not a social science?
a.|psychology|
b.|mathematics|
c.|economics|
d.|political science|
e.|sociology|

ANS: B PTS: 1 DIF: 1
NAT: Financial theories, analysis, reporting, and markets
LOC: The study of economics, and definitions of economics
TOP: Economics | Scarcity and Choice

5. What does economics have in common with sociology?
a.|Economics and sociology ask fundamentally the same questions.|
b.|Economics and sociology use the same tools to analyze issues.|
c.|Both are social sciences.|
d.|What and how economists study is very similar to what and how sociologists study.|
e.|Explaining something about society is only a secondary purpose in both areas.|

ANS: C PTS: 1 DIF: 2
NAT: Financial theories, analysis, reporting, and markets
LOC: The study of economics, and definitions of economics
TOP: Economics | Scarcity and Choice

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