1001. Economics is the study of _________.

A. Each and every business, including how they function, why they exist, and how they affect us.
B. Decisions that people must make because goods and services are limited. *
C. How to spend, save, invest, and keep a checkbook balanced
D. The financial exchange, the security market,and speculation techniques

1002. In economics, The term ” scarcity” refers to the fact that.

A. Everything worthwhile costs money
B. There is no society that can produce enough goods to satisfy everyone’s needs.
C. Some people are poor even in wealthy societies like the United States
D. If a product’s price is set too low, it can cause shortages.

1003. Scarcity means that_____.

A. We can’t have everything we want at once.
B. We must choose between the things we want.
C. Each and every one of our activities comes with costs.
D. In order to acquire other things, we must give up some things.
E. All of the preceding is accurate *

1004. A recurring theme in economics is ______.

A. Despite having limited resources, people have unending desires
B. The are unlimited resources
C. We are unaware of the wealth of our nation.
D. In the face of limited resources, people have few wants.

1005. What does the phrase” There is not such thing as a free lunch” mean?

A. Individuals must always pay money for the food they eat
B. A restaurant owner will not serve customers food unless they pay for it.
C. Restaurant owners act selfishly
D. In order to consume any good, other goods must be sacrificed (forgotten) *

1006. Can economics theories be tested?

A. No, because people rarely respond in a predictable manner
B. Yes, Since all individuals respond in the same ways to the same situation
C. No, Since the general behaviour of a large number of individuals cannot be predicted.
D. Yes, since individuals will typically respond in a predictable manner to changes in costs and benefits.

1007. In economics, We often say that a particular event will occur” as long as ” other things stay the same” The condition that other things stay the same is also called ____.

A. Ceteris Paribus *
B. Marginal Decision -Making
C. Incentives
D. Opportunity cost

1008. Economics theory assumes that people_______.

A. Greedy and self-centered behavior that disregards the well-being of others
B. Don’t act in their own best interests
C. Are not motivated by self-interest
D. Are motivated by self-interest but still might be concerned for the welfare of others. *

1009. Why does it make sense to assume that people are rational . If you want to predict their behavior?

A. When making decisions, people don’t think about their feelings.
B. People who act in a way that gets them what they want the most will likely do it again and learn from their mistakes.
C. People tend to always make the right decisions and never make mistakes
D. People always think logically about what to do

1010. Macroeconomics deals with ________.

A. Only the decisions made by individuals and their results
B. Only the decisions and outcomes made by businesses
C. Mostly large scale decisions made by countries and governments and their results *
D. Only the individual decisions, but not the outcomes.