Microeconomics Limits Alternatives Choices

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Chapter 01
Limits, Alternatives, and Choices

Multiple Choice Questions

1. Economics is the study of:
A. increasing the level of productive resources so there is maximum output in society. B. increasing the level of productive resources so there is a minimum level of income. C. how people, institutions, and society make choices under conditions of scarcity. D. the efficient use of scarce resources paid for at the minimum level of cost to consumers and businesses.
2. The primary focus of the study of economics is with:
A. expanding the production of goods and services.
B. equalizing the distribution of consumer income and wealth. C. making the most efficient use of scarce productive resources. D. reallocating resources from consumption to production in the economy.

3. The general concern of economics is with the study of the: A. degree of competition in stock and bond markets in the economy. B. efficient use of limited productive resources to satisfy economic wants. C. issue of equality in the distribution of income and wealth among households. D. budget deficits in the domestic economy and trade deficits in the international economy.

4. Which of the following is not a central focus of the "economic perspective"? A. Scarcity and choice.
B. The scientific method.
C. Purposeful behavior.
D. Marginal analysis.

5. The term scarcity in economics refers to the fact that:
A. economic wants are limited and resources are abused.
B. even in the richest country some people go hungry.
C. no country can produce enough products to satisfy everybody's economic wants. D. it is impossible to produce too much of any particular good or service in a market economy.
6. The basic economic problem is essentially one of deciding how to make the best use of: A. limited resources to satisfy limited economic wants.
B. limited resources to satisfy unlimited economic wants.
C. unlimited resources to satisfy unlimited economic wants.
D. unlimited resources to satisfy limited economic wants.

7. The key economic concept that serves as the basis for the study of economics is: A. inflation.
B. unemployment.
C. money.
D. scarcity.

8. As a student of economics, when you speak of scarcity, you are referring to the ability of society to: A. employ all of its resources.
B. consume all that is produced.
C. satisfy economic wants given limited resources.
D. continually make technological breakthroughs and increase production.
9. As a consequence of the condition of scarcity:
A. there is never enough of anything.
B. production has to be centrally planned.
C. things which are plentiful have relatively high prices.
D. individuals and communities have to make choices from among alternatives.

10. What is the economic meaning of the expression that "there is no such thing as a free lunch"? A. It refers to "free-riders," who do not pay for the cost of a product, but who receive the benefit from it. B. It means that economic freedom is limited by the amount of income available to the consumer. C. It means that there is an opportunity cost when resources are used to provide "free" products. D. It indicates that products only have value because people are willing to pay for them.

11. According to the Gates, Winfrey, and Rodriguez illustration: A. Gates, Winfrey, and Rodriguez made a mistake by not attending college. B. Gates, Winfrey, and Rodriguez did not weigh marginal benefits against marginal costs when making decisions. C. Opportunity costs vary greatly between individuals and matter in decision-making. D. Attending college has little effect on lifetime earnings.

12. One major feature of the economic perspective is:
A. that scarcity is more important than choice.
B. that costs are more important than benefits.
C. the assumption of purposeful behavior by individuals.
D. the recognition of economic resources in the economy.

13. The satisfaction or pleasure one gets from...
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