Question 1

The basic concern of economics is to:

Group of answer choices

keep business firms from losing money.

use unlimited resources to produce goods and services to satisfy limited wants.

prove that capitalism is better than socialism.

study the choices people make.

Flag this Question

Question 2

Scarcity in economics means:

Group of answer choices

there must be poor people in rich countries.

economists are clearly not doing their jobs.

) not having sufficient resources to produce all the goods and services we want.

the wants of people are limited.

Flag this Question

Question 3

The ceteris paribus ("all other things unchanged") assumption is useful because it:

Group of answer choices

helps to approximate real-world conditions.

states the main economic objectives.

helps to restrict analysis to the effect of a single economic factor.

is a vehicle for determining whether a particular outcome is "good" or "bad."

Question 4

An economic system is the set of rules that define _______ and _______.

Group of answer choices

resources; prices

market prices; factors of production

who gets to vote; when elections will be held

how an economy's resources are to be owned; how decisions about the resources are to be made

Flag this Question

Question 5

The model that shows the goods and services the economy is capable of producing is the model of:

Group of answer choices

utility

scarcity

the fallacy of composition

production possibilities

Flag this Question

Question 6

If the opportunity cost of manufacturing machinery is higher in the United States than in Britain and the opportunity cost of manufacturing sweaters is lower in the United States than in Britain, then the United States will:

Group of answer choices

import both sweaters and machinery from Britain

export both sweaters and machinery to Britain

export sweaters to Britain and import machinery from Britain

import sweaters from Britain and export machinery to Britain

Question 7

Demand is best defined as the:

Group of answer choices

relationship between the price of a good and the quantity people are able to purchase, all other things unchanged.

amount of a commodity that buyers would be willing and able to purchase at a specific price.

relationship between the price of a good and the quantity people are willing and able to purchase, all other things unchanged.

price that buyers would be willing and able to pay for a specific quantity of a good.

Flag this Question

Question 8

.(Exhibit: The Demand for Chocolate-Covered Peanuts) If the price of chocolate-covered peanuts increases from 40 cents to 50 cents, Dan will reduce his quantity demanded from 160 bags to 140 bags due to:

Exhibit: The Demand for Chocolate-Covered Peanuts

Quantity Demanded

(bags per month)

Price (per bag)GeorgeBarbaraDan

9010060

80151080

702020100

602530120

503040140

403550160

304060180

Group of answer choices

the law of demand.

the law of supply.

a change in his tastes and preferences

a decline in his income

Flag this Question

Question 9

Exhibit: The Demand for Chocolate-Covered Peanuts

Quantity Demanded

(bags per month)

Price (per bag)GeorgeBarbaraDan

9010060

80151080

702020100

602530120

503040140

403550160

304060180

(Exhibit: The Demand for Chocolate-Covered Peanuts) If George, Barbara, and Dan are the only three buyers in the market, and the price of a bag of chocolate-covered peanuts is 80 cents, the total market demand is ________ bags per month.

Group of answer choices

70

80

280

105

Flag this Question

Question 10

Elasticity is

Group of answer choices

the change in a dependent variable divided by the change in an independent variable.

the quantity of a good divided by its price.

the ratio of the percentage change in a dependent variable to the percentage change in an independent variable.

the price of a good divided by its quantity