Chapter 1 VF Flashcards
- The economic problem is essentially one of deciding how to make the best use of
limited resources to satisfy unlimited wants
Economists assume that people customarily behave rationally, meaning that people:
virtually always weigh the personal benefits and costs of every available action and choose an action
on the basis of their individual wants
An economist who says that consumer wants are inexhaustible means that:
consumers wants are virtually unlimited and, therefore, incapable of being fully satisfied
The fundamental problem of economics is:
the scarcity of productive resources relative to consumer wants
The economic problem stems from the fact that
resources are scarce relative to people’s demand for goods and services
The study of economics is carried out because:
resources are scarce in relation to consumer wants
The scarcity problem:
persists because a society’s consumer wants exceed its available economic resources
Because of scarcity, the efficient use of resources is:
an important economic goal in all economies
As used in economics, the notion of scarcity means that:
resources are not so plentiful that all consumer wants can be fulfilled
Stocks and bonds are not considered to be an economic resource because they:
do not add to the economy’s stock of real capital
The money payments made to owners of human resources are:
wages, salaries, or profit
Economic resources do NOT include:
stocks and bonds
Which of the following is a capital resource?
a dump truck
The role of the entrepreneur involves:
bearing risks
Economics can best be described as the study of how:
to distribute limited resources among alternative ends
Economics is primarily the study of
how to use scarce resources among alternative ends
Microeconomics is concerned with the
) behaviour of individual participants in various markets
Which of the following is a microeconomic statement?
The price of wheat declined last year.
Macroeconomics approaches the study of economics from the viewpoint of:
entire economic sectors
Which of the following is a macroeconomic statement?
The gross profits of all Canadian businesses were $60 billion last year
Economic models:
are generalizations of economic reality
Economic models:
emphasize basic economic relationships by abstracting from the complexities of the real world
Which of the following is a correct statement?
Though not quantitatively exact, economic laws are useful because they allow us to predict and,
therefore, to control or to adjust to events
An economic model usually includes:
two or more factors that have measurable values
