Question 1

Which of the following best describes the concept of scarcity in economics?

Accepted Answer

Scarcity means that resources are limited and cannot satisfy all human wants.

Question 2

A student decides to spend an hour studying for an economics exam instead of going out with friends. The opportunity cost of studying is:

Accepted Answer

The enjoyment the student would have received from going out with friends.

Question 3

Which of the following statements is a positive statement?

Accepted Answer

The unemployment rate in BC is above the national average.

Question 4

Suppose a factory can produce either 100 units of product A or 200 units of product B in a day. What is the opportunity cost of producing one unit of product A?

Accepted Answer

$$2$$ units of product B$

Question 5

Which of the following best illustrates a 'how-much' decision made at the margin?

Accepted Answer

A student deciding whether to study for one more hour or not.

Question 6

Which of the following is NOT a factor of production?

Accepted Answer

Money used to buy raw materials.

Question 7

In the context of economics, what does the term 'incentive' refer to?

Accepted Answer

A reward or penalty that motivates behavior.

Question 8

Which of the following is an example of a normative statement?

Accepted Answer

Food labelling policy with nutrition data ought to be encouraged in all countries.

Question 9

If a country decides to allocate more resources to healthcare and less to defense, what economic question is it addressing?

Accepted Answer

"What to produce?"

Question 10

Which of the following best describes the difference between microeconomics and macroeconomics?

Accepted Answer

Microeconomics studies individual choices and markets, while macroeconomics studies the economy as a whole.

Question 11

A government policy that taxes carbon emissions is most directly intended to:

Accepted Answer

Provide incentives to reduce pollution.

Question 12

Which of the following is an example of a tradeoff?

Accepted Answer

Choosing to spend money on a new phone instead of saving for a vacation.

Question 13

Suppose the marginal benefit (MB) of producing one more unit of a good is $$MB = 10$$ and the marginal cost (MC) is $$MC = 8. $$According to economic theory, what should the producer do?

Accepted Answer

Produce more units, since $$MB \u003e MC.$$

Question 14

Which of the following best describes 'equity' in economics?

Accepted Answer

Fairness in the distribution of resources and income.

Question 15

A news headline reads: "Amazon Will Deliver Groceries for Free." This is most likely an example of:

Accepted Answer

A choice made in self-interest that may also promote social interest.

Question 16

If a policy change makes at least one person better off without making anyone worse off, the change is considered:

Accepted Answer

Efficient.

Question 17

Which of the following is an example of a macroeconomic issue?

Accepted Answer

The national unemployment rate increases.

Question 18

Which of the following best describes the role of entrepreneurship as a factor of production?

Accepted Answer

Combining land, labor, and capital to make strategic business decisions.

Question 19

If the marginal cost (MC) of producing a good is $$MC = 12$$ and the marginal benefit (MB) is $$MB = 10$$, what should a rational producer do?

Accepted Answer

Produce fewer units, since $$MC \u003e MB.$$

Question 20

Which of the following is a real-world example of opportunity cost?

Accepted Answer

A student who chooses to attend university gives up the income they could have earned by working full-time.

Introduction to Economics: Scarcity, Choice, and the Scope of Economic Inquiry

Study Guide - Practice Questions

Study Guide - Flashcards