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Copyright Cengage Learning. Poweredby Cognero.Page 1 Chapter_1_The_Art_and_Science_of_Economic_Analysis

1.The fact that people have unlimited wants means that:

• they always want more of at least one good.
• each person has an unlimited desire for every good.
• labor unions demand wage increases.
• selfish people are not concerned about others.
• people buy goods without regard to what they can afford.

ANSWER: a

FEEDBACK: a. Correct. Our wants are unlimited because we always want more of a good thing.Because resources are scarce, we have to choose from among our many wants,

and in doing so, we must forgo satisfying some other wants. See 1-1: The

Economic Problem: Scarce Resources, Unlimited Wants

• Incorrect. Our wants are unlimited because we always want more of a good thing.

Because resources are scarce, we have to choose from among our many wants,

and in doing so, we must forgo satisfying some other wants. See 1-1: The

Economic Problem: Scarce Resources, Unlimited Wants

• Incorrect. Our wants are unlimited because we always want more of a good thing.

Because resources are scarce, we have to choose from among our many wants,

and in doing so, we must forgo satisfying some other wants. See 1-1: The

Economic Problem: Scarce Resources, Unlimited Wants

• Incorrect. Our wants are unlimited because we always want more of a good thing.

Because resources are scarce, we have to choose from among our many wants,

and in doing so, we must forgo satisfying some other wants. See 1-1: The

Economic Problem: Scarce Resources, Unlimited Wants

• Incorrect. Our wants are unlimited because we always want more of a good thing.

Because resources are scarce, we have to choose from among our many wants,

and in doing so, we must forgo satisfying some other wants. See 1-1: The

Economic Problem: Scarce Resources, Unlimited Wants

POINTS: 1

DIFFICULTY: Easy

LEARNING OBJECTIVES: MACR.MCEACH.17.01.01 - Explain the economic problem of scarce resources and unlimited wants NATIONAL STANDARDS: United States - BUSPROG: Analytic - Communication Abilities TOPICS: The Economic Problem: Scarce Resources, Unlimited Wants KEYWORDS: Bloom's: Understand

2.The problem of scarce resources:

• means that there are not enough jobs in some cities.
• could be solved if the unemployment rate fell.
• is that there are not enough resources to satisfy people's unlimited wants.
• is that resources are used inefficiently.
• can be solved by lowering taxes.

ANSWER: c

FEEDBACK: a. Incorrect. A resource is scarce when it is not freely available. Because resources are scarce, we have to choose from among our many wants, and in doing so, we must forgo satisfying some other wants. See 1-1: The Economic Problem: Scarce Resources, Unlimited Wants

• Incorrect. A resource is scarce when it is not freely available. Because resources

are scarce, we have to choose from among our many wants, and in doing so, we must forgo satisfying some other wants. See 1-1: The Economic Problem: Scarce Resources, Unlimited Wants Economics A Contemporary Introduction, 11e William McEachern (Test Bank All Chapters) 1 / 4

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• Correct. A resource is scarce when it is not freely available. Because resources

are scarce, we have to choose from among our many wants, and in doing so, we must forgo satisfying some other wants. See 1-1: The Economic Problem: Scarce Resources, Unlimited Wants

• Incorrect. A resource is scarce when it is not freely available. Because resources

are scarce, we have to choose from among our many wants, and in doing so, we must forgo satisfying some other wants. See 1-1: The Economic Problem: Scarce Resources, Unlimited Wants

• Incorrect. A resource is scarce when it is not freely available. Because resources

are scarce, we have to choose from among our many wants, and in doing so, we must forgo satisfying some other wants. See 1-1: The Economic Problem: Scarce Resources, Unlimited Wants

POINTS: 1

DIFFICULTY: Easy

LEARNING OBJECTIVES: MACR.MCEACH.17.01.01 - Explain the economic problem of scarce resources and unlimited wants NATIONAL STANDARDS: United States - BUSPROG: Analytic - Communication Abilities TOPICS: The Economic Problem: Scarce Resources, Unlimited Wants KEYWORDS: Bloom's: Understand

• Which of the following sentences is the best example of scarcity of time?
• Peter buys a hamburger.
• John-Michael wants to spend his money on a new hoverboard.
• Alexander is doing homework instead of going to the movies with his friends.
• Amanda, a geography teacher, is retired.
• Bill is unemployed.

ANSWER: c

FEEDBACK: a. Incorrect. Scarcity is the condition in which our unlimited wants cannot be satisfied by our limited resources. See 1-1: The Economic Problem: Scarce Resources, Unlimited Wants

• Incorrect. Scarcity is the condition in which our unlimited wants cannot be

satisfied by our limited resources. See 1-1: The Economic Problem: Scarce Resources, Unlimited Wants

• Correct. Scarcity is the condition in which our unlimited wants cannot be satisfied

by our limited resources. See 1-1: The Economic Problem: Scarce Resources, Unlimited Wants

• Incorrect. Scarcity is the condition in which our unlimited wants cannot be

satisfied by our limited resources. See 1-1: The Economic Problem: Scarce Resources, Unlimited Wants

• Incorrect. Scarcity is the condition in which our unlimited wants cannot be

satisfied by our limited resources. See 1-1: The Economic Problem: Scarce Resources, Unlimited Wants

POINTS: 1

DIFFICULTY: Easy

LEARNING OBJECTIVES: MACR.MCEACH.17.01.01 - Explain the economic problem of scarce resources and unlimited wants NATIONAL STANDARDS: United States - BUSPROG: Analyitc TOPICS: The Economic Problem: Scarce Resources, Unlimited Wants KEYWORDS: Bloom's: Understand

4. Scarcity: 2 / 4

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• applies to a brain surgeon but not to a cab driver.
• is not a problem for a politician.
• exists only in rich countries.
• exists only in poor countries.
• occurs when a resource is not freely available.

ANSWER: e

FEEDBACK: a. Incorrect. Scarcity is the condition in which our unlimited wants cannot be satisfied by our limited resources. See 1-1: The Economic Problem: Scarce Resources, Unlimited Wants

• Incorrect. Scarcity is the condition in which our unlimited wants cannot be

satisfied by our limited resources. See 1-1: The Economic Problem: Scarce Resources, Unlimited Wants

• Incorrect. Scarcity is the condition in which our unlimited wants cannot be

satisfied by our limited resources. See 1-1: The Economic Problem: Scarce Resources, Unlimited Wants

• Incorrect. Scarcity is the condition in which our unlimited wants cannot be

satisfied by our limited resources. See 1-1: The Economic Problem: Scarce Resources, Unlimited Wants

• Correct. Scarcity is the condition in which our unlimited wants cannot be satisfied

by our limited resources. See 1-1: The Economic Problem: Scarce Resources, Unlimited Wants

POINTS: 1

DIFFICULTY: Easy

LEARNING OBJECTIVES: MACR.MCEACH.17.01.01 - Explain the economic problem of scarce resources and unlimited wants NATIONAL STANDARDS: United States - BUSPROG: Analytic - Communication Abilities TOPICS: The Economic Problem: Scarce Resources, Unlimited Wants KEYWORDS: Bloom's: Understand

5. Because people's wants are unlimited but resources are scarce, _____:

• only the rich get everything they want.
• choices must be made.
• there will be more services produced than goods.
• people search for spiritual fulfillment rather than material fulfillment.
• poor people never get anything they want.

ANSWER: b

FEEDBACK: a. Incorrect. A resource is scarce when it is not freely available. Because resources are scarce, we have to choose from among our many wants, and in doing so, we must forgo satisfying some other wants. See 1-1: The Economic Problem: Scarce Resources, Unlimited Wants

• Correct. A resource is scarce when it is not freely available. Because resources

are scarce, we have to choose from among our many wants, and in doing so, we must forgo satisfying some other wants. See 1-1: The Economic Problem: Scarce Resources, Unlimited Wants

• Incorrect. A resource is scarce when it is not freely available. Because resources

are scarce, we have to choose from among our many wants, and in doing so, we must forgo satisfying some other wants. See 1-1: The Economic Problem: Scarce Resources, Unlimited Wants

• Incorrect. A resource is scarce when it is not freely available. Because resources

are scarce, we have to choose from among our many wants, and in doing so, we must forgo satisfying some other wants. See 1-1: The Economic Problem: Scarce 3 / 4

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Resources, Unlimited Wants

• Incorrect. A resource is scarce when it is not freely available. Because resources

are scarce, we have to choose from among our many wants, and in doing so, we must forgo satisfying some other wants. See 1-1: The Economic Problem: Scarce Resources, Unlimited Wants

POINTS: 1

DIFFICULTY: Easy

LEARNING OBJECTIVES: MACR.MCEACH.17.01.01 - Explain the economic problem of scarce resources and unlimited wants NATIONAL STANDARDS: United States - BUSPROG: Analytic - Communication Abilities TOPICS: The Economic Problem: Scarce Resources, Unlimited Wants KEYWORDS: Bloom's: Remember

• Which of the following statements regarding the basic economic problem of scarcity is correct?
• The problem only exists in countries that are not highly industrialized.
• The problem is likely to disappear as production increases.
• The problem is sure to disappear as technology improves.
• The problem will exist as long as resources are available in limited amounts.
• The problem will disappear as a person's income falls.

ANSWER: d

FEEDBACK: a. Incorrect. Scarcity is the condition in which our unlimited wants cannot be satisfied by our limited resources. Everybody faces the problem of scarcity. See 1-1: The Economic Problem: Scarce Resources, Unlimited Wants

• Incorrect. Scarcity is the condition in which our unlimited wants cannot be

satisfied by our limited resources. Everybody faces the problem of scarcity. See 1-1: The Economic Problem: Scarce Resources, Unlimited Wants

• Incorrect. Scarcity is the condition in which our unlimited wants cannot be

satisfied by our limited resources. Everybody faces the problem of scarcity. See 1-1: The Economic Problem: Scarce Resources, Unlimited Wants

• Correct. Scarcity is the condition in which our unlimited wants cannot be satisfied

by our limited resources. Everybody faces the problem of scarcity. See 1-1: The

Economic Problem: Scarce Resources, Unlimited Wants

• Incorrect. Scarcity is the condition in which our unlimited wants cannot be

satisfied by our limited resources. Everybody faces the problem of scarcity. See 1-1: The Economic Problem: Scarce Resources, Unlimited Wants

POINTS: 1

DIFFICULTY: Easy

LEARNING OBJECTIVES: MACR.MCEACH.17.01.01 - Explain the economic problem of scarce resources and unlimited wants NATIONAL STANDARDS: United States - BUSPROG: Analytic - Communication Abilities TOPICS: The Economic Problem: Scarce Resources, Unlimited Wants KEYWORDS: Bloom's: Understand

7. Economics is best defined as the study of how:

• individuals decide to use scarce resources in an attempt to satisfy their unlimited wants.
• individuals can make money.
• the government should deal with unemployment and inflation.
• to eliminate the problem of scarce resources.
• to run a business.
• / 4