ECON100 EXAM 1 QUESTIONS WITH
VERIFIED SOLUTIONS
The central problem of economics is the: - correct Answer-Human wants exceeding the
availability of resources.
The primary concern of economics is the study of: - correct Answer-How best to allocate
scarce resources among competing uses.
Which of the following is true about the factors of production?
-The physical limits of production are determined by all of the factors of production and
technology
-Rich countries have an unlimited quantity of factors.
-The factors include natural resources but not skilled labor.
-Some factors are scarce but other factors are not. - correct Answer-The physical limits
of production are determined by all of the factors of production and technology
Because of scarcity, - correct Answer--choices must be made.
-there are not enough goods and services to satisfy everyone.
Factors of production are: - correct Answer-the resources used to create output.
Opportunity cost is:
-the value of the best alternative that you give up.
-the most desired goods and services that are foregone in order to obtain something
else.
-what you sacrifice in order to do something.
-All of the above are true. - correct Answer-All of the above
Assuming the level of resources and technology are constant, if France decreases the
size of its military, then:
-Its' production possibilities curve will shift outward.
-Its' production possibilities curve will shift inward.
-Its' production of consumer goods can increase.
-Its' production of consumer goods must decrease. - correct Answer-Its' production of
consumer goods can increase.
There would be no reason for students to study the concept of opportunity costs if:
-The market mechanism functioned to allocate resources.
-The government allocated resources.
-The production possibilities curve bowed outward.
, -Resources were no longer scarce. - correct Answer-Resources were no longer scarce.
Societies must address the question of WHAT to produce because:
-We can't produce all the goods and services we want.
-The amount of money in an economy is limited.
-We are wasteful and use resources inefficiently.
-Our economy experiences market failures. - correct Answer-We can't produce all the
goods and services we want.
Microeconomics focuses on:
-Full employment, price stability, and economic growth.
-The behavior of individuals, firms, and government agencies.
-Land, labor, and capital.
-Centrally planned economies. - correct Answer-The behavior of individuals, firms, and
government agencies.
One NEWSWIRE article in the text, "Hurricane Sandy to Raise Prices on Used Cars"
describes the impact of thousands of cars being destroyed by the storm.. This is an
example of:
-An increase in supply.
-A decrease in supply.
-An increase in demand.
-A decrease in demand. - correct Answer-A decrease in supply
Ceteris paribus, which of the following will cause the demand for peanut butter to
decrease?
-The factories that produce peanut butter close down for safety reasons.
-The workers who pick peanuts, the main ingredient in peanut butter, demand a higher
wage.
-Many people learn that they are allergic to peanut butter.
-It is reported that peanut butter prevents heart attacks. - correct Answer-Many people
learn that they are allergic to peanut butter.
If demand is constant, a decrease in the supply of gasoline will cause the equilibrium
price:
-To rise and quantity to fall.
-And quantity both to rise.
-To fall and quantity to rise.
-And quantity both to fall. - correct Answer-To rise and quantity to fall.
The price of chocolate candy bars rises. This could be due to:
-A decrease in the wage rate paid to workers in the candy bar factories.
-A decrease in the cost of chocolate, which is used to produce candy bars.
-A subsidy by the federal government for the producers of chocolate candy bars.
-A decrease in the number of chocolate candy bar producers. - correct Answer-A
decrease in the number of chocolate candy bar producers.
VERIFIED SOLUTIONS
The central problem of economics is the: - correct Answer-Human wants exceeding the
availability of resources.
The primary concern of economics is the study of: - correct Answer-How best to allocate
scarce resources among competing uses.
Which of the following is true about the factors of production?
-The physical limits of production are determined by all of the factors of production and
technology
-Rich countries have an unlimited quantity of factors.
-The factors include natural resources but not skilled labor.
-Some factors are scarce but other factors are not. - correct Answer-The physical limits
of production are determined by all of the factors of production and technology
Because of scarcity, - correct Answer--choices must be made.
-there are not enough goods and services to satisfy everyone.
Factors of production are: - correct Answer-the resources used to create output.
Opportunity cost is:
-the value of the best alternative that you give up.
-the most desired goods and services that are foregone in order to obtain something
else.
-what you sacrifice in order to do something.
-All of the above are true. - correct Answer-All of the above
Assuming the level of resources and technology are constant, if France decreases the
size of its military, then:
-Its' production possibilities curve will shift outward.
-Its' production possibilities curve will shift inward.
-Its' production of consumer goods can increase.
-Its' production of consumer goods must decrease. - correct Answer-Its' production of
consumer goods can increase.
There would be no reason for students to study the concept of opportunity costs if:
-The market mechanism functioned to allocate resources.
-The government allocated resources.
-The production possibilities curve bowed outward.
, -Resources were no longer scarce. - correct Answer-Resources were no longer scarce.
Societies must address the question of WHAT to produce because:
-We can't produce all the goods and services we want.
-The amount of money in an economy is limited.
-We are wasteful and use resources inefficiently.
-Our economy experiences market failures. - correct Answer-We can't produce all the
goods and services we want.
Microeconomics focuses on:
-Full employment, price stability, and economic growth.
-The behavior of individuals, firms, and government agencies.
-Land, labor, and capital.
-Centrally planned economies. - correct Answer-The behavior of individuals, firms, and
government agencies.
One NEWSWIRE article in the text, "Hurricane Sandy to Raise Prices on Used Cars"
describes the impact of thousands of cars being destroyed by the storm.. This is an
example of:
-An increase in supply.
-A decrease in supply.
-An increase in demand.
-A decrease in demand. - correct Answer-A decrease in supply
Ceteris paribus, which of the following will cause the demand for peanut butter to
decrease?
-The factories that produce peanut butter close down for safety reasons.
-The workers who pick peanuts, the main ingredient in peanut butter, demand a higher
wage.
-Many people learn that they are allergic to peanut butter.
-It is reported that peanut butter prevents heart attacks. - correct Answer-Many people
learn that they are allergic to peanut butter.
If demand is constant, a decrease in the supply of gasoline will cause the equilibrium
price:
-To rise and quantity to fall.
-And quantity both to rise.
-To fall and quantity to rise.
-And quantity both to fall. - correct Answer-To rise and quantity to fall.
The price of chocolate candy bars rises. This could be due to:
-A decrease in the wage rate paid to workers in the candy bar factories.
-A decrease in the cost of chocolate, which is used to produce candy bars.
-A subsidy by the federal government for the producers of chocolate candy bars.
-A decrease in the number of chocolate candy bar producers. - correct Answer-A
decrease in the number of chocolate candy bar producers.
