The fact that people have unlimited wants means that _____

Group of answer choices

they always want more of at least one good.

people always purchase the goods that cost the least.

there is always an excess supply of necessary goods in the market.

selfish people are not concerned about others.

people do not behave rationally while making a choice.

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Question 2

1pts

The problem of scarce resources _____

Group of answer choices

can be solved in a market economy, but not in a command economy.

can be solved if all resources are jointly owned by the public and private sectors.

implies that the resources are not freely available.

arises because all natural resources are owned by the government in every country.

can be solved by lowering taxes in an economy.

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Question 3

1pts

Which of the following sentences is the best example of scarcity of time?

Group of answer choices

Peter buys a hamburger.

John-Michael wants to spend his money on a new hoverboard.

Alexander is doing homework instead of going to the movies with his friends.

Amanda, a geography teacher, is retired and spends her time gardening.

Bill is unemployed.

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Question 4

1pts

Scarcity _____

Group of answer choices

applies to a brain surgeon but not to a cab driver.

is not a problem for politicians.

exists only in rich countries.

exists only in poor countries.

exists to a greater or lesser extent for everybody.

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Question 5

1pts

Because resources are scarce and wants are unlimited, _____

Group of answer choices

only the rich get everything they want.

we must choose from among our many wants.

there will be more services produced than goods.

people search for spiritual fulfillment rather than material fulfillment.

poor people never get anything they want.

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Question 6

1pts

Which of the following statements regarding the basic economic problem of scarcity is correct?

Group of answer choices

The problem will exist only in countries that are not highly industrialized.

The problem will disappear as production increases.

The problem will disappear as technology improves.

The problem will exist as long as resources are available in limited amounts.

The problem will disappear as a person's income falls.

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Question 7

1pts

Economics is best defined as the study of how _____

Group of answer choices

people make decisions in a world of scarcity.

governments can influence the social structure.

to separate the executive from the legislature and the judiciary.

individuals can participate in electing their representatives to the government.

to change the class structure of an economy.

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Question 8

1pts

Which of the following is the best definition of economics?

Group of answer choices

An investigation of the evolutionary process of mankind

A study of society as a system of interconnected parts

A study of how people deal with the problem of scarcity

An examination of the structure and the role of the government in an economy

A study of how to conduct free and fair elections in a country

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Question 9

1pts

Economics is best described as the _____

Group of answer choices

study of choice when scarcity exists.

study of the development of human society.

study of the composition and structure of matter.

branch of science that uses the principles of sociology.

branch of science that is based on value judgments.

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Question 10

1pts

Economics:

Group of answer choices

studies human behavior when scarcity exists and choices must be made.

does not provide a reasonable explanation of how people make decisions.

does not accurately explain any human behavior since it is based on the assumption of rationality.

is better at showing the way things ought to be than other social sciences.

is the only social science that can explain the existence and behavior of public institutions.

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Question 11

1pts

Alan is a retired economist who enjoys building toy trains for his grandkids. He uses a workbench and tools from his garage, lumber he bought from the lumber store for $10, and varnish and paint he had left over from another project last year. Since a retired economist is always an economist, which of the following statements is he likely to make about building toy trains?

Group of answer choices

I'm not paying for any resources, so the toy trains I'm building are a good example of free goods.

I only paid $10 for the lumber, so the toy trains I'm building are a good example of free goods.

I'm using scarce resources to build the toy trains.

The resources I'm using to build the toy trains are not scarce.

If I had used lumber that I cut from the tree in my backyard instead of buying it from the store, then the toy trains I'm building would be a good example of free goods.

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Question 12

1pts

Michigan has an abundant supply of fresh water. However, an economist would consider it a scarce resource because _____

Group of answer choices

water is necessary for human survival.

pollution will eventually destroy all life in the Great Lakes.

water is limited in supply relative to people's unlimited wants.

water commands a very high price.

the cost of supplying water is prohibitively high.

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Question 13

1pts

Natural resources are _____

Group of answer choices

not considered scarce because no one pays for them.

not used in producing luxury goods.

renewable and exhaustible.

available in unlimited quantities.

not considered scarce because they are not produced by society.

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Question 14

1pts

Which of the following fundamental resources is the basis of labor?

Group of answer choices

Capital

Natural resources

Time

Profit

Entrepreneurial ability

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Question 15

1pts

A resource is something that _____

Group of answer choices

is used to produce goods and services.

is provided by nature, and not produced by society.

exists in unlimited quantities in developed countries.

must be produced by a firm.

is always available free of cost.

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Question 16

1pts

In economics, capital is defined as _____

Group of answer choices

natural resources, such as water, oil, and iron ore.

the number of people in the labor force.

all human creations used to produce goods and services.

the money exchanged in the underground economy.

the willingness of business owners to take risks.

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Question 17

1pts

Which of the following would an economist classify as physical capital?

Group of answer choices

100 shares of Microsoft

a $50 bill

a credit card

a lawyer's laptop

a bauxite mine in Jamaica

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Question 18

1pts

Which of the following is not classified as physical capital by economists?

Group of answer choices

a $20 bill in a firm's petty cash drawer

the building where an economics class meets

a plumber's wrench

a railroad car

A factory

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Question 19

1pts

When economists refer to human capital, they refer to _____

Group of answer choices

income earned by capitalists.

skills used in production.

dividends earned by investors.

bonds held by the public.

bank loans given to the public.

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Question 20

1pts

Which of the following is an example of physical capital?

Group of answer choices

the owner of a pizza shop

bulldozers

a college education

carpentry skills

money

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Question 21

1pts

An entrepreneur _____

Group of answer choices

always makes a profit.

is appointed by the board of directors to manage the operations of a firm.

is a profit-seeking decision maker.

is a parasite that benefits by not paying other resources for their services.

is the manager who runs an enterprise and keeps the customers happy.

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Question 22

1pts

The payment in return for the use of capital is _____

Group of answer choices

profit.

wages.

rent.

dividends.

interest.

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Question 23

1pts

The payment in return for the use of natural resources is _____

Group of answer choices

profit.

wages.

rent.

dividends.

interest.

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Question 24

1pts

Entrepreneurial ability is rewarded by_____

Group of answer choices

profit.

wages.

rent.

dividends.

interest.

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Question 25

1pts

Resources can be divided into _____

Group of answer choices

people, money, and machines.

savings, spending, investment, and capital.

human resources, technology, and government.

natural resources, labor, capital, and entrepreneurial ability.

income, interest, and expenditure.

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Question 26

1pts

Natural resources _____

Group of answer choices

include bodies of water, trees, oil reserves, and minerals.

are not scarce.

are inexhaustible as long as they are managed properly.

are the result of human effort.

do not follow the law of demand and supply.

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Question 27

1pts

In economics, capital refers to _____

Group of answer choices

wages earned by workers.

dividends and interest earned by investors.

the foreign reserves held by governments.

machines, buildings, tools, and knowledge.

the net worth of firms.

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Question 28

1pts

An entrepreneur is _____

Group of answer choices

an individual who has an education.

an organizer who seeks profitable opportunities and is willing to accept risks.

a person who is hired by a firm to manage its operations.

a person who earns profit without accepting any risks.

a person who is appointed by the board of directors of a firm for a term of five years.

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Question 29

1pts

If a firm produces and sells only one unit of a good, its profit would be equal to the _____

Group of answer choices

market price of the good.

revenue from the item sold minus the cost of the resources used to produce the good.

difference between the interest paid by the firm on its outstanding loans and the rate of depreciation.

sum of the price of the good and the wages paid to labor.

product of the wages paid to labor and the market price of the good.

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Question 30

1pts

Unlike a service, a good _____

Group of answer choices

is desirable.

uses resources to satisfy wants.

is physical and tangible.

is abundant and free.

is a resource.

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Question 31

1pts

The difference between a good and a service is that _____

Group of answer choices

a good helps satisfy unlimited wants, but a service does not.

a service helps satisfy unlimited wants, but a good does not.

a service is available in unlimited quantities, but a good is not.

a good is available in unlimited quantities, but a service is not.

a good is tangible, but a service is not.

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Question 32

1pts

Which of the following is a service?

Group of answer choices

anything that can be used indefinitely

anything for which people pay less money than they pay for a good

an intangible activity that satisfies human wants

any output produced by the service sector industry, such as fast food

something that is more desirable than a good

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Question 33

1pts

As goods and services are scarce, _____

Group of answer choices

the opportunity cost is zero.

people must choose among alternatives.

all human wants can be satisfied.

resource prices are fixed.

commodities are free.

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Question 34

1pts

Goods and services are limited in supply because _____

Group of answer choices

people are greedy.

they are produced using scarce resources.

people have limited wants.

they are produced by firms that seek profits.

the government wants to maintain its power over the economy.

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Question 35

1pts

A good or service is considered scarce if _____

Group of answer choices

any quantity of it can be consumed at a zero price.

the amount people desire exceeds the amount available at a zero price.

the amount people desire equals the amount available at any price.

the amount people desire is less than the amount available at any price.

the amount people desire is less than the amount available at a zero price.

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Question 36

1pts

The expression "there's no such thing as a free lunch" means that _____

Group of answer choices

services may be free, but goods are never free.

even if a good or service has a price of zero, it has a cost.

charitable organizations should not serve free lunches to the poor.

poor people are really the ones who pay for their allegedly free lunches.

someone has to pay the market price for a good or service.

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Question 37

1pts

Your best friend buys you lunch on your birthday. You think this was not a free lunch because _____

Group of answer choices

even if you didn't pay in dollars for it, you paid for it in extra calories.

the resources used to produce the lunch were not available to satisfy other wants.

you disagree with the expression "the best things in life are free."

you can eat only if you work out first.

neither sea water nor air is free.

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Question 38

1pts

The interaction of economic decision makers _____

Group of answer choices

is not based on marginal analysis.

determines how an economy's resources are allocated.

is not important in economic analysis.

occurs infrequently.

does not involve ordinary citizens.

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Question 39

1pts

Goods and services are bought and sold in _____

Group of answer choices

product markets.

resource markets.

foreign exchange markets.

the stock market.

the spot market.

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Question 40

1pts

Resources are bought and sold in _____

Group of answer choices

product markets.

resource markets.

foreign exchange markets.

the stock market.

the spot market.

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Question 41

1pts

Households ____

Group of answer choices

own and sell resources.

play a very minor role in an economy.

supply goods and services.

are the largest purchasers of resources.

set the price for goods.

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Question 42

1pts

The labor market is an example of _____

Group of answer choices

the derivatives market.

a market in which the natural forces of demand and supply do not operate.

a market in which there is no scarcity.

a resource market.

a product market.

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Question 43

1pts

In the simple circular flow model, the two markets are _____

Group of answer choices

capital goods and consumer goods markets.

goods and services markets.

product and resource markets.

households and firms markets.

domestic and foreign markets.

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Question 44

1pts

In the circular-flow model, households supply all of the following except _____

Group of answer choices

labor.

goods and services.

capital.

entrepreneurial ability.

natural resources.

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Question 45

1pts

In the circular-flow model, firms demand all of the following except _____

Group of answer choices

labor.

goods and services.

capital.

entrepreneurial ability.

natural resources.

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Question 46

1pts

In the circular-flow model, firms supply _____

Group of answer choices

labor.

goods and services.

capital.

entrepreneurial ability.

natural resources.

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Question 47

1pts

Exhibit 1.1

Refer tothe circular-flow modelin Exhibit 1.1.Box B represents _____

Group of answer choices

firms.

resource markets.

households.

product markets.

expenditures.

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Question 48

1pts

Exhibit 1.1

Refer tothe circular-flow modelin Exhibit 1.1.If box D represents firms, then box C represents _____

Group of answer choices

firms.

resource markets.

households.

product markets.

expenditures.

Question 49

1pts

Exhibit 1.1

Refer tothe circular-flow modelin Exhibit 1.1.If box C represents households, then box D represents _____

Group of answer choices

firms.

resource markets.

households.

product markets.

expenditures.