1.1 Definition and Questions

1 Copyright © 2021 Pearson Education, Inc.Essential Foundations of Economics, 9e (Bade/Parkin) Chapter 1 Getting Started 1.1 Definition and Questions 1) Scarcity exists because

• human wants exceed the resources available to satisfy them.
• some individuals have low income.
• the costs of production are high.
• some people make bad economic decisions.
• people take too much leisure time.

Answer: A

Topic: Scarcity

Skill: Level 1: Definition

Section: Checkpoint 1.1

Status: Old

AACSB: Reflective thinking

2) Scarcity

• is the inability to satisfy all our wants.
• leads to higher prices.
• applies only to people living in poverty.
• is not something that affects very rich people.
• used to exist everywhere but has been eliminated in advanced economies.

Answer: A

Topic: Scarcity

Skill: Level 1: Definition

Section: Checkpoint 1.1

Status: Old

AACSB: Reflective thinking

3) Scarcity requires that we

• produce efficiently.
• learn to limit our wants.
• have the most rapid economic growth possible.
• have unlimited resources.
• make choices about what goods and services to produce.

Answer: E

Topic: Scarcity

Skill: Level 1: Definition

Section: Checkpoint 1.1

Status: Old

AACSB: Reflective thinking

Essential Foundations of Economics 9e Robin Bade, Michael Parkin (Test Bank All Chapters, 100% Original Verified, A+ Grade) 1 / 4

2 Copyright © 2021 Pearson Education, Inc.4) Scarcity means that

• what we can produce with our resources is greater than our material wants.
• resources are unlimited.
• wants are greater than what we can produce with our resources.
• governments must make up for shortages in resources.
• choices made in self-interest cannot be the same as those made in the social interest.

Answer: C

Topic: Scarcity

Skill: Level 1: Definition

Section: Checkpoint 1.1

Status: Old

AACSB: Reflective thinking

5) Because human wants are insatiable and unlimited while available resources are limited, people are said to face the problem of

• scarcity.
• why to produce.
• macroeconomics.
• microeconomics.
• social interest versus self-interest.

Answer: A

Topic: Scarcity

Skill: Level 1: Definition

Section: Checkpoint 1.1

Status: Old

AACSB: Reflective thinking

6) Which of the following statements BEST describes the study of economics? Economics studies how

• to organize production so that scarcity does not occur.
• firms make profits.
• we make choices in the face of scarcity.
• to create incentives so that scarcity does not exist.
• businesses reach decisions.

Answer: C

Topic: Scarcity

Skill: Level 1: Definition

Section: Checkpoint 1.1

Status: Old

AACSB: Reflective thinking

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3 Copyright © 2021 Pearson Education, Inc.7) Scarcity forces people to

• choose among available alternatives.
• cheat and steal.
• be unwilling to help others.
• live at a low standard of living.
• consume as much as they can as quickly as they can.

Answer: A

Topic: Scarcity

Skill: Level 2: Using definitions

Section: Checkpoint 1.1

Status: Old

AACSB: Reflective thinking

8) Scarcity means we must

• consume less.
• produce less.
• make choices.
• earn more.
• work more.

Answer: C

Topic: Scarcity

Skill: Level 1: Definition

Section: Checkpoint 1.1

Status: Old

AACSB: Reflective thinking

9) What is the reason that all economic issues and problems occur?

• All nations use some form of money to buy and sell goods and services.
• Humans are always wasteful and inefficient in production and consumption.
• Powerful governments are able to control production and consumption.
• Human wants exceed the resources available to satisfy them.
• People seek only their own self-interest.

Answer: D

Topic: Scarcity

Skill: Level 2: Using definitions

Section: Checkpoint 1.1

Status: Old

AACSB: Reflective thinking

10) The study of economics is best described as a study of

• the factors that influence the stock and bond markets.
• capitalism.
• the choices made in producing goods and services.
• coping with scarcity, and choices made as a result of scarcity in a society.
• how people earn a living.

Answer: D

Topic: Definition of economics

Skill: Level 1: Definition

Section: Checkpoint 1.1

Status: Old

AACSB: Reflective thinking 3 / 4

4 Copyright © 2021 Pearson Education, Inc.

11) Which of the following statements BEST describes the study of economics? Economics studies how

• to organize production so that scarcity does not occur.
• firms make profits.
• we make choices in the face of scarcity.
• to create incentives so that scarcity does not exist.
• businesses reach decisions.

Answer: C

Topic: Definition of economics

Skill: Level 1: Definition

Section: Checkpoint 1.1

Status: Old

AACSB: Reflective thinking

12) Which of the following BEST defines economics?

• Economics teaches how to limit our wants.
• Economics studies how to choose the best alternative when coping with scarcity.
• Economics helps you earn as much money as possible.
• Economics analyzes all aspects of human behavior in general.
• Economics is concerned with prices and quantities of goods and services, both at the individual level

and at the industry level.

Answer: B

Topic: Definition of economics

Skill: Level 1: Definition

Section: Checkpoint 1.1

Status: Old

AACSB: Reflective thinking

13) Economics is the social science that studies

• the real reasons people buy goods and services.
• the psychology of individuals and businesses.
• whether a nation has enough natural resources.
• how people make choices to cope with scarcity.
• how choices made in the social interest could eliminate scarcity.

Answer: D

Topic: Definition of economics

Skill: Level 1: Definition

Section: Checkpoint 1.1

Status: Old

AACSB: Reflective thinking

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