5 . 1. Economics Is the study of a. Money b. How people seek to satisfy their needs and wants by making choices C. The effort that people devote to a task for which they are paid. d. Limited quantities of resources. 2. The biggest goal of economics is to study how we make choices in order to solve the problem of a. Shortages b. Surpluses C. Scarcity d. Revenue 3. Which of the following best explains the law of increasing opportunity costs? a. Inflation will always drive up prices. b. Nominal GDP tends to be higher than Real GDP C. In order to achieve growth, there must be investment d. As more of an item is produced, the cost of producing it increases. 4. The economic concept of the invisible hand refers to the idea that a. Government intervention can regulate the economy b. The market will regulate itself C. An individual's decision making has no impact on the market d. Government intervention has no impact on the market. 5. The United States' economic system is considered a system. a. Mixed b. Democratic C. Socialist d. Centrally Planned 6. If you drive your car to school, you receive the benefits, but. other people will pay some of the "cost", such as increased traffic and pollution. These increased costs that other pay are known as a. Free-riders b. Self-interest C. Externalities d. Subsidies