Exam (elaborations)
Economics Chapter 1 and 2
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Microeconomics for Life: Smart Choices for You, 2e (Cohen)Chapter 1 What's in Economics for You? Scarcity, Opportunity Cost, Trade, and Models
1.1 Are You Getting Enough? Scarcity and Choice
1) Economics is about
A) making money.
B) greed.
C) making choices because of scarcity.
D) overcoming scarcity.
E) overcoming greed.
Answer: C
Diff: 1 Type: MC Page Ref: 4
Skill: Recall
Objective: 1.1 Explain scarcity and describe why you must make smart choices among your
wants.
2) Economics is about
A) how individuals make the best possible choices.
B) how businesses make the best possible choices.
C) how governments make the best possible choices.
D) how choices interact in markets.
E) all of the above.
Answer: E
Diff: 1 Type: MC Page Ref: 4
Skill: Recall
Objective: 1.1 Explain scarcity and describe why you must make smart choices among your
wants.
3) Which of the following limits our ability to get everything we want?
A) scarcity
B) specialization
C) socialism
D) socialization
E) time
Answer: E
Diff: 1 Type: MC Page Ref: 4
Skill: Applied
Objective: 1.1 Explain scarcity and describe why you must make smart choices among your
wants.
1
Copyright © 2016 Pearson Canada, Inc.
,4) Which of the following limits our ability to get everything we want?
A) capitalism
B) scarcity
C) socialism
D) democracy
E) money
Answer: E
Diff: 1 Type: MC Page Ref: 4
Skill: Applied
Objective: 1.1 Explain scarcity and describe why you must make smart choices among your
wants.
5) Some social activists believe that scarcity occurs because we always want more. This idea is
called
A) activism.
B) paternalism.
C) monetarism.
D) materialism.
E) socialism.
Answer: D
Diff: 2 Type: MC Page Ref: 4
Skill: Recall
Objective: 1.1 Explain scarcity and describe why you must make smart choices among your
wants.
6) In a world of scarcity,
A) all products are free.
B) opportunity cost is zero.
C) you are not limited by time.
D) you do not need to work.
E) you must make choices among alternatives.
Answer: E
Diff: 1 Type: MC Page Ref: 4
Skill: Applied
Objective: 1.1 Explain scarcity and describe why you must make smart choices among your
wants.
2
Copyright © 2016 Pearson Canada, Inc.
,7) The inability to satisfy all of our wants is called the problem of
A) opportunity cost.
B) scarcity.
C) incentives.
D) marginal cost.
E) comparative advantage.
Answer: B
Diff: 1 Type: MC Page Ref: 4
Skill: Applied
Objective: 1.1 Explain scarcity and describe why you must make smart choices among your
wants.
8) The problem of scarcity exists
A) only in economies without incentives.
B) only in economies with incentives.
C) in all economies.
D) only when people are unemployed.
E) now but will be eliminated with economic growth.
Answer: C
Diff: 2 Type: MC Page Ref: 4
Skill: Applied
Objective: 1.1 Explain scarcity and describe why you must make smart choices among your
wants.
9) The textbook title - Economics for Life - comes from a quote by George Bernard Shaw.
Answer: TRUE
Diff: 2 Type: TF Page Ref: 4
Skill: Recall
Objective: 1.1 Explain scarcity and describe why you must make smart choices among your
wants.
10) The textbook title - Economics for Life - comes from the quote "Economy is the art of
making the most of life."
Answer: TRUE
Diff: 2 Type: TF Page Ref: 4
Skill: Recall
Objective: 1.1 Explain scarcity and describe why you must make smart choices among your
wants.
11) Scarcity is not a problem for a wealthy professional athlete like Tiger Woods.
Answer: FALSE
Diff: 1 Type: TF Page Ref: 4
Skill: Applied
Objective: 1.1 Explain scarcity and describe why you must make smart choices among your
wants.
3
Copyright © 2016 Pearson Canada, Inc.
, 12) Scarcity arises because we all have limited money, time, and energy.
Answer: TRUE
Diff: 1 Type: TF Page Ref: 4
Skill: Recall
Objective: 1.1 Explain scarcity and describe why you must make smart choices among your
wants.
13) The National Ballet of Canada does not face a problem of scarcity.
Answer: FALSE
Diff: 1 Type: TF Page Ref: 4
Skill: Applied
Objective: 1.1 Explain scarcity and describe why you must make smart choices among your
wants.
14) There are some people and organizations who do not face the problem of scarcity.
Answer: FALSE
Diff: 1 Type: TF Page Ref: 4
Skill: Applied
Objective: 1.1 Explain scarcity and describe why you must make smart choices among your
wants.
15) If you could be immortal and infinitely rich, you would not face the problem of scarcity.
Answer: TRUE
Diff: 2 Type: TF Page Ref: 4
Skill: Applied
Objective: 1.1 Explain scarcity and describe why you must make smart choices among your
wants.
16) Economics is about overcoming scarcity.
Answer: FALSE
Diff: 1 Type: TF Page Ref: 4
Skill: Applied
Objective: 1.1 Explain scarcity and describe why you must make smart choices among your
wants.
17) Economics is about overcoming greed.
Answer: FALSE
Diff: 1 Type: TF Page Ref: 4
Skill: Applied
Objective: 1.1 Explain scarcity and describe why you must make smart choices among your
wants.
4
Copyright © 2016 Pearson Canada, Inc.
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