The fundamental problem of economics is
Multiple Choice
The law of increasing opportunity costs.
The scarcity of resources relative to human wants.
How to get government to operate efficiently.
How to create employment for everyone.
Answer
The scarcity of resources relative to human wants.
In economics, scarcity means that
Multiple Choice
A shortage of a particular good will cause the price to fall.
A production possibilities curve cannot accurately represent the trade-off between two goods.
Society's desires exceed resources available.
The market mechanism has failed.
Answer
Society's desires exceed resources available.
The basic factors of production include
Multiple Choice
Land, labor, money, and capital.
Land, labor, money, and inputs.
Labor and money.
Land, labor, capital, and entrepreneurship.
Answer
Land, labor, capital, and entrepreneurship.
Which of the following is not a factor of production?
Multiple Choice
A psychiatrist.
$100,000 cash.
A bulldozer.
Six thousand acres of farmland.
Answer
$100,000 cash.
Which economist argued that free markets unleashed the "animal spirits" of entrepreneurs, propelling innovation, technology, and growth?
Multiple Choice
Lord Kelvin.
Kenneth Olsen.
Irving Fisher.
John Maynard Keynes.
Answer
John Maynard Keynes.
Opportunity cost may be defined as the
Multiple Choice
Goods or services that are forgone in order to obtain something else.
Dollar prices paid for final goods and services.
Dollar cost of producing a particular product.
Difference between wholesale and retail prices.
Answer
Goods or services that are forgone in order to obtain something else.
The production possibilities curve illustrates
Multiple ChoiceThe limitations that exist because of scarce resources.
That there is no limit to what an economy can produce.
That there is no limit to the level of output.
The existence of unlimited wants and resources.
Answer
The limitations that exist because of scarce resources.
In terms of the production possibilities curve, inefficiency is represented by
Multiple ChoiceAll points on the curve.
All points outside the curve.
All points inside the curve.
A rightward shift of the curve.
Answer
All points inside the curve.
In a market economy, the people who receive the goods and services that are produced are those who
Multiple ChoiceNeed the goods and services the most.
Have the most political power.
Want the goods and services the most.
Are willing to pay the highest price.
Answer
Are willing to pay the highest price.
Government intervention may achieve a more optimal outcome than the market mechanism when addressing
Multiple Choice
Inefficient bureaucracy.
Consumption of cigarettes.
The supply of new hot dog stands.
None of the choices are correct.
Answer
Consumption of cigarettes.
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