When used by economists, the term "land", when referring to one of the main factors of production, is defined as the surface of the earth.
True
False
Question 2
3 / 3 points
As used by economists, the term "capital" refers to gold, stocks, bonds and other highly liquid assets.
True
False
Question 3
3 / 3 points
Normative economics is involved with economic claims that can be verified by third party analysis.
True
False
Question 4
3 / 3 points
Which of the following is NOT true about scarcity?
Scarcity is a temporary imbalance between the quantity supplied and the quantity demanded at a prevailing market price. It is easily solved by letting price fall.
Scarcity is the vast difference between man's wants and the capaibilities of available resources. It has always existed and will always exist.
Any good that has a price is scarce.
Scarcity cannot be resolved by a change in prices or a change in income. Man's wants exceed resource capabilities, and this is what causes scarcity.
Question 5
3 / 3 points
Marginal analysis focuses on the change brought about by doing one more thing or buying one more good. If the marginal benefit is greate than the marginal cost, then one should take the action or buy the good.
True
False
Question 6
3 / 3 points
A positive economic statement is one that is true.
A) True
B) False
Question 7
3 / 3 points
The fallacy of composition refers to the error of assuming that what is good for the individual must also be good for the group or entire economy.
A) True
B) False
Question 8
3 / 3 points
A resource is scarce when it is hard to find at a given point in time. When there is a temporary shortage of a resource, it is scarce, but only during that limited period of time.
A) True
B) False
Question 9
3 / 3 points
The word "marginal" refers to the incremental or additional change that results from buying one more unit of something or doing one more specified action.
A) True
B) False
Question 10
3 / 3 points
Without the presence of scarcity, there would be no economic problem (hence, no economics!)
A) True
B) False
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