Exam (elaborations) TEST BANK FOR Economics 14th Canadian Edition By Christopher T.S. Ragan

MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question. 1) Which of the following statements provides the best definition of economics? A) The study of the most equitable distribution of scarce resources. B) The study of the use of scarce resources to satisfy unlimited human wants. C) The study of the production of goods and services. D) The study of the productive capacity of a nation's factors of production. E) The study of production and increasing its efficiency. 1) Answer: B Explanation: A) B) C) D) E) 2) Society's resources are often divided into broad categories. They are A) goods and services. B) factors of consumption. C) land, labour, and capital. D) population and natural resources. E) tangible commodities and intangible commodities. 2) Answer: C Explanation: A) B) C) D) E) 3) Consider the following list: a worker with training in video gaming technology, 10 hectares of arable land in southern Ontario, a fishing trawler in Nova Scotia, an ice-cream truck at a park in Quebec. Each of these is an example of A) a factor of production. B) a capital resource. C) a commodity. D) goods and services. E) an economic service. 3) Answer: A Explanation: A) B) C) D) E) 1 4) A basic underlying point in economics is that A) people have unlimited wants in the face of limited resources. B) there are unlimited resources. C) governments should satisfy the needs of the people. D) people have limited wants in the face of limited resources. E) governments should never interfere in the workings of a market economy. 4) Answer: A Explanation: A) B) C) D) E) 5) Which of the following best describes the study of economics? A) how to plan an economy B) how to limit human wants so that scarce resources are sufficient C) why resources are scarce D) the allocation of scarce resources among alternative uses E) how to distribute income as equally as possible 5) Answer: D Explanation: A) B) C) D) E) 6) Economics can best be described as A) the study of how a society ought to allocate its resources. B) the study of the use of scarce resources to satisfy unlimited human wants. C) the application of sophisticated mathematical models to address social problems. D) a normative science. E) the study of how to reduce inflation and unemployment. 6) Answer: B Explanation: A) B) C) D) E) 7) Scarcity is likely to be A) a problem that will be solved by the proper use of available resources. B) unique to the twentieth century. C) a problem that will always exist. D) a result of the work ethic. E) eliminated with a better understanding of economics. 7) Answer: C Explanation: A) B) C) D) E) 2 8) The concept of scarcity in economics usually refers to a condition A) where society is not employing all of its available resources in an efficient manner. B) where people's wants can never be satisfied by the available resources. C) that afflicts only poor countries. D) where too many frivolous goods and services are produced at the expense of socially desirable goods and services. E) where production is efficient, but distribution is inefficient. 8) Answer: B Explanation: A) B) C) D) E) 9) Which of the following statements best describes the underlying feature in most economic problems? A) People have unlimited wants in the face of limited resources. B) There are unlimited resources. C) Our country is rich; we just don't realize it. D) People have limited wants in the face of limited resources. E) Governments should never interfere in the workings of a market economy. 9) Answer: A Explanation: A) B) C) D) E) 10) Because resources are scarce, individuals are required to A) make choices among alternatives. B) use resources inefficiently. C) sacrifice production but not consumption. D) improve distribution but not production. E) improve production but not distribution. 10) Answer: A Explanation: A) B) C) D) E)