1 All economic questions are about

1 Copyright © 2023 PearsonEducation, Inc.Microeconomics, 14e (Parkin) Chapter 1 What Is Economics?

• Definition of Economics

1) All economic questions are about

• how to make money.
• what to produce.
• how to cope with scarcity.
• how to satisfy all our wants.

Answer: C

Topic: Scarcity

Skill: Recognition

Status: Old

AACSB: Reflective thinking

2) All economic questions arise because we

• want more than we can get.
• want more than we need.
• have an abundance of resources.
• have limited wants that need to be satisfied.

Answer: A

Topic: Scarcity

Skill: Recognition

Status: Old

AACSB: Reflective thinking

3) Economics is best defined as the study of how people, businesses, governments, and societies

• choose abundance over scarcity.
• make choices to cope with scarcity.
• use their infinite resources.
• attain wealth.

Answer: B

Topic: Scarcity

Skill: Conceptual

Status: Old

AACSB: Reflective thinking

4) Scarcity is a situation in which

• people cannot satisfy all their wants.
• most people can get only bare necessities.
• people can satisfy all their wants.
• some people can get all they want and some cannot.

Answer: A

Topic: Scarcity

Skill: Recognition

Status: Old

AACSB: Reflective thinking

MicroEconomics 14e (Global Edition) By Michael Parkin (Test Bank All Chapters, 100% Original Verified, A+ Grade) 1 / 4

2 Copyright © 2023 Pearson Education, Inc.

5) Economists point out that scarcity confronts

• neither the poor nor the rich.
• the poor but not the rich.
• the rich but not the poor.
• both the poor and the rich.

Answer: D

Topic: Scarcity

Skill: Conceptual

Status: Old

AACSB: Ethical understanding and reasoning

6) Scarcity is

• our inability to satisfy all our wants.
• a situation that exists during economic recessions but not during economic booms.
• eliminated by choices.
• an economic problem only for poor people.

Answer: A

Topic: Scarcity

Skill: Recognition

Status: Old

AACSB: Reflective thinking

7) When an economist talks of scarcity, the economist is referring to the

• ability of society to employ all of its resources.
• ability of society to consume all that it produces.
• inability of society to satisfy all human wants because of limited resources.
• ability of society to continually make technological breakthroughs and increase production.

Answer: C

Topic: Scarcity

Skill: Recognition

Status: Old

AACSB: Reflective thinking

8) Fundamental economic problems basically arise from

• the fact that society has more than it needs.
• turmoil in the stock market.
• the unequal distribution of income.
• our wants exceeding our scarce resources.

Answer: D

Topic: Scarcity

Skill: Recognition

Status: Old

AACSB: Reflective thinking

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3 Copyright © 2023 Pearson Education, Inc.9) Scarcity exists because

• society and people are greedy and wasteful.
• our wants exceed the resources available to satisfy them.
• of the inefficient choices we make.
• poor people need more food and other goods.

Answer: B

Topic: Scarcity

Skill: Recognition

Status: Old

AACSB: Reflective thinking

10) Scarcity can be eliminated through

• the use of market mechanisms.
• exploration that helps us find new resources.
• wise use of our resources.
• None of the above because scarcity cannot be eliminated.

Answer: D

Topic: Scarcity

Skill: Recognition

Status: Old

AACSB: Reflective thinking

11) As an economic concept, scarcity applies to

• both money and time.
• money but not time.
• time but not money.
• neither time nor money.

Answer: A

Topic: Scarcity

Skill: Conceptual

Status: Old

AACSB: Reflective thinking

12) In every economic system, choices must be made because resources are ________ and our wants are

________.

• unlimited; limited
• limited; unlimited
• unlimited; unlimited
• limited; limited

Answer: B

Topic: Scarcity

Skill: Conceptual

Status: Old

AACSB: Reflective thinking

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4 Copyright © 2023 Pearson Education, Inc.13) The problem of "scarcity" applies

• only in industrially developed countries because resources are scarce in these countries.
• only in underdeveloped countries because there are few productive resources in these countries.
• only in economic systems that are just beginning to develop because specialized resources are scarce.
• to all economic systems, regardless of their level of development.

Answer: D

Topic: Scarcity

Skill: Conceptual

Status: Old

AACSB: Reflective thinking

14) Scarcity requires that people must

• cooperate.
• compete.
• trade.
• make choices.

Answer: D

Topic: Scarcity

Skill: Conceptual

Status: Old

AACSB: Reflective thinking

15) People must make choices because

• most people enjoy shopping.
• of scarcity.
• there are many goods available.
• None of the above answers is correct.

Answer: B

Topic: Scarcity

Skill: Conceptual

Status: Old

AACSB: Reflective thinking

16) An incentive

• could be a reward but could not be a penalty.
• could be a penalty but could not be a reward.
• could be either a reward or a penalty.
• is the opposite of a tradeoff.

Answer: C

Topic: Incentive

Skill: Recognition

Status: Old

AACSB: Reflective thinking

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