QUESTION 1

1. The term "scarcity" in economics refers to the fact that:
2. A.everything costs money.B.even in the richest countries some people go hungry.C.it is impossible to produce too much of any particular good.D.no country can yet produce enough to satisfy completely everybody's wants for everything.

QUESTION 2

1. It is said that U.S. is "an economy of scarcity."This statement:
2. A.is false, because the U.S. is the richest country the worldhas ever known.
3. B.is true, because our resources are not sufficient to allow us to achieve all of our goals.
4. C.is false, because the resources that are scarce in the U.S. can always be imported from abroad.
5. D.is true, but only temporarily- by the turn of the century we will probably have adequate resources to achieve all of our goals.

QUESTION 3

1. The fact that sever unemployment and depressions occur from time to time proves that:
2. A.true scarcity doesn't really exist.
3. B.the unemployed find work so unpleasant that they won't take jobs.
4. C.the economic system sometimes fails to allocate its scarce resources efficiently.
5. D.we don't really want all the goods and services it would be possible to produce if everyone stayed on the job.

QUESTION 4

1. Unemployment, underemployment, and inefficiency:
2. A.cannot be illustrated by the use of a production possibility frontier.
3. B.can all be illustrated by a point on the production possibility frontier.
4. C.can all be illustrated by a point inside of the production possibility frontier.
5. D.can all be illustrated by a point outside of the production possibility frontier.

QUESTION 5

1. Other things constant, which, if either, of the following statements is correct?
3. I.If unemployment increases among those between ages 17 and 21, the opportunity cost of going to college decreases.
5. II.If men generally earn more than women in the labor market, the opportunity cost of attending college is higher for
6. men than for women.
7. A.I only.
8. B.II only.
9. C.Both I and II.
10. D.Neither I nor II.