BASIC ASSUMPTIONS, PP. 6-7

Question 1

Who wrote The Wealth of Nations?

Answer 1

Adam Smith

Question 2

Economics is MOST concerned with the tension
between

Answer 2

wants and resources

Question 3

Scarcity implies

Answer 3

trade-offs

Question 4

Opportunity cost could be BEST described as
the

Answer 4

value of the next best alternative

Question 5

Which of the following costs are LEAST likely to
be considered part of the cost of college?

Answer 5

room and board

Question 6

If consumers select the action that produces the
greatest benefit, they are said to be

Answer 6

rational

Question 7

Gains from trade arise MOST directly from
different

Answer 7

opportunity costs

Question 8

Sophie can either babysit for $10, mow the lawn
for $15, or drive her brother to soccer practice
for $12. What is Sophie’s opportunity cost if she
chooses to mow the lawn?

Answer 8

$10/$12

Question 9

Which of the following issues BEST represents
the concept of scarcity?

Answer 9

Individuals have twenty-four hours in a
day.

Question 10

The number of items in an average
supermarket is CLOSEST to

Answer 10

33,000

Question 11

What MUST be true if two consumers
voluntarily trade with each other?

Answer 11

The benefits outweigh the costs for both
people.