Understanding Economics A Contemporary Perspective 8th Edition by Mark Lovewell Test bank
Chapter 1
Student: ___________________________________________________________________________
1.The economic problem is essentially one of deciding how to make the best use of:
A. unlimited resources to satisfy unlimited wants
B. limited resources to satisfy unlimited wants
C. unlimited resources to satisfy limited wants
D. limited resources to satisfy limited wants
E. free resources to satisfy expensive wants
2.Economists assume that people customarily behave rationally, meaning that people:
A. virtually always weigh the personal benefits and costs of every available action and choose an action on the basis of their individual wants
B. act in a rational way when buying and selling products, but not in other settings
C. act rationally when they buy products, but not when they sell them
D. act rationally when they sell products, but not when they buy them
E. are unable to act in an irrational way
3.An economist who says that consumer wants are inexhaustible means that:
A. economic resources are valuable only because they can be used to produce consumer goods
B. economic resources—natural, capital, and human resources—are scarce
C. consumers wants are virtually unlimited and, therefore, incapable of being fully satisfied
D. the nature of consumer wants is highly unpredictable
E. the nature of consumer demand varies from time to time and from country to country
4.The fundamental problem of economics is:
A. to establish equity between personal and business taxation
B. to establish a democratic political framework for the provision of social goods and services
C. to establish prices that accurately reflect the relative scarcities of products and resources
D. to achieve a fair distribution of money income to reduce poverty
E. the scarcity of productive resources relative to consumer wants
5.The economic problem stems from the fact that:
A. the production possibilities curve bows out to the right
B. resources are scarce relative to people's demand for goods and services
C. people act to maximize their own welfare
D. historically the production possibilities curve has been shifting down toward the origin
E. the production possibilities curve bows in to the left
6.The study of economics is carried out because:
A. government interferes with the efficient distribution of scarce resources
B. resources are scarce in relation to consumer wants
C. the market system is an obstacle to the efficient use of plentiful resources to satisfy limited wants
D. resources are overly abundant as compared with wants and, therefore, a distribution problem exists
E. government aids in the efficient distribution of scarce resources
7.The scarcity problem:
A. persists only because countries have failed to achieve continual full employment
B. persists because a society's consumer wants exceed its available economic resources
C. has been eliminated in all industrialized nations
D. has been eliminated in affluent societies such as Canada and the United States
E. is eliminated when a nation has achieved full employment
8.Because of scarcity, the efficient use of resources is:
A. an important economic goal in all economies
B. an important economic goal only in command economies
C. an important economic goal only in market economies
D. not an important economic goal
E. an important economic goal only in traditional economies
9.As used in economics, the notion of scarcity means that:
A. mineral deposits are available only in limited amounts
B. resources are not so plentiful that all consumer wants can be fulfilled
C. many resources are freely available
D. the quantities available of some resources exceed the demand for them
E. the demand for some resources is nonexistent
Student: ___________________________________________________________________________
1.The economic problem is essentially one of deciding how to make the best use of:
A. unlimited resources to satisfy unlimited wants
B. limited resources to satisfy unlimited wants
C. unlimited resources to satisfy limited wants
D. limited resources to satisfy limited wants
E. free resources to satisfy expensive wants
2.Economists assume that people customarily behave rationally, meaning that people:
A. virtually always weigh the personal benefits and costs of every available action and choose an action on the basis of their individual wants
B. act in a rational way when buying and selling products, but not in other settings
C. act rationally when they buy products, but not when they sell them
D. act rationally when they sell products, but not when they buy them
E. are unable to act in an irrational way
3.An economist who says that consumer wants are inexhaustible means that:
A. economic resources are valuable only because they can be used to produce consumer goods
B. economic resources—natural, capital, and human resources—are scarce
C. consumers wants are virtually unlimited and, therefore, incapable of being fully satisfied
D. the nature of consumer wants is highly unpredictable
E. the nature of consumer demand varies from time to time and from country to country
4.The fundamental problem of economics is:
A. to establish equity between personal and business taxation
B. to establish a democratic political framework for the provision of social goods and services
C. to establish prices that accurately reflect the relative scarcities of products and resources
D. to achieve a fair distribution of money income to reduce poverty
E. the scarcity of productive resources relative to consumer wants
5.The economic problem stems from the fact that:
A. the production possibilities curve bows out to the right
B. resources are scarce relative to people's demand for goods and services
C. people act to maximize their own welfare
D. historically the production possibilities curve has been shifting down toward the origin
E. the production possibilities curve bows in to the left
6.The study of economics is carried out because:
A. government interferes with the efficient distribution of scarce resources
B. resources are scarce in relation to consumer wants
C. the market system is an obstacle to the efficient use of plentiful resources to satisfy limited wants
D. resources are overly abundant as compared with wants and, therefore, a distribution problem exists
E. government aids in the efficient distribution of scarce resources
7.The scarcity problem:
A. persists only because countries have failed to achieve continual full employment
B. persists because a society's consumer wants exceed its available economic resources
C. has been eliminated in all industrialized nations
D. has been eliminated in affluent societies such as Canada and the United States
E. is eliminated when a nation has achieved full employment
8.Because of scarcity, the efficient use of resources is:
A. an important economic goal in all economies
B. an important economic goal only in command economies
C. an important economic goal only in market economies
D. not an important economic goal
E. an important economic goal only in traditional economies
9.As used in economics, the notion of scarcity means that:
A. mineral deposits are available only in limited amounts
B. resources are not so plentiful that all consumer wants can be fulfilled
C. many resources are freely available
D. the quantities available of some resources exceed the demand for them
E. the demand for some resources is nonexistent