Multiple Choice Questions

1-1 © 2013 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.Chapter 01

Alleviating Human Misery: The Role of Economic Reasoning

Multiple Choice Questions

• The fundamental economic problem is
• Inflation
• That resources are scarce relative to wants
• Supply and demand
• How to make more money
• Unemployment

• Which of the follow best describes human wants and desires? They
• Are unlimited in the aggregate
• Stop after a person attains the things necessary for life
• Do not include "extras" like variety
• Are not affected by what others have
• Do not change once we attain our desired set of goods

• The means for satisfying wants are
• Insatiable
• Unlimited
• Infinite
• Scarce
• Unavailable

• Economic reasoning would not be necessary if
• Our wants were limited
• Resources were expansive
• Scarcity were decreased
• We could have everything we wanted
• Politicians were better at running the economy

(Economics of Social Issues 20e Ansel Sharp, Charles Register, Paul Grimes) (Test Bank all Chapters) 1 / 4

Chapter 01 - Alleviating Human Misery: The Role of Economic Reasoning

1-2 © 2013 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.

• A three-year-old learns about the fundamental economic problem when she
• Gets presents for her birthday
• Is punished for drawing on the walls
• Has to eat green beans for dinner
• Is told she can't have a toy at the store
• Watches her favorite cartoon

• Which of the following is the primary goal of an economy?
• Maximizing economic growth
• Minimizing unemployment
• Minimizing the effects of scarcity
• Minimizing the national debt
• Maximizing GDP

• The fundamental economic problem involves
• Overpopulation
• Inflation and unemployment
• Scarce resources and unlimited wants
• Cheap foreign labor
• Supply and demand

• Labor resources include
• The equipment workers use to complete their work
• Only non-management personnel
• Any efforts of a person to produce goods
• Only the physical efforts of an economy's people
• All of the above

• Which of the following is an example of a capital resource?
• A firm's employee
• Money in a firm's bank account
• Agricultural land
• A worker's productivity
• All of the above
• / 4

Chapter 01 - Alleviating Human Misery: The Role of Economic Reasoning

1-3 © 2013 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.

• Which of the following is NOT an example of a capital resource?
• Forests
• A printing press
• Semi-finished materials
• A computer technician
• Inventories

• The know-how and the means and methods of production available in an economy are

known as

• Technology
• Capital
• Human capital
• Labor
• Management

• Which of the following is not a capital resource?
• Land
• Stocks and bonds
• Buildings
• Tools
• Mineral deposits

Questions 13 - 17 refer to the graph below.

• / 4

Chapter 01 - Alleviating Human Misery: The Role of Economic Reasoning

1-4 © 2013 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.

• Given production possibilities curve (a), point N suggests that
• The economy is attaining full employment, but not full production
• The economy is attaining full production, but not full employment
• The economy is using its available resources inefficiently
• The economy is attaining both full employment and full production
• Point N is unattainable

• The movement from curve (a) to curve (b) suggests
• A movement from unemployment to full employment
• An improvement in capital good technology, but not in consumer good technology
• An improvement in consumer good technology, but not in capital good technology
• A decline in the total output of society
• The society becomes worse off

• At which of the following points is the economy producing efficiently?
• Q
• G
• N
• B
• E

• If the economy were producing combination G initially, the cost of producing additional

BD units of capital goods is the value of

• The resources used in producing OD of capital goods
• The resources used in producing EF of consumer goods
• The resources used in producing OE of consumer goods
• BD units of capital goods
• BD units of consumer goods
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