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Chapter 1 Ten Principles of Economics TRUE/FALSE 1. Scarcity means that there is less of a good or resource available than people wish to have. ANS: T DIF: 1 REF: 1-0 NAT: Analytic LOC: Scarcity, tradeoffs, and opportunity cost TOP: Scarcity MSC: Definitional 2. Economics is the study of how evenly goods and services are distributed within society. ANS: F DIF: 1 REF: 1-0 NAT: Analytic LOC: The Study of economics, and definitions in economics TOP: Economics MSC: Definitional 3. Economics is the study of how society allocates its unlimited resources. ANS: F DIF: 1 REF: 1-0 NAT: Analytic LOC: The Study of economics, and definitions in economics TOP: Economics MSC: Definitional 4. With careful planning, we can usually get something that we like without having to give up something else that we like. ANS: F DIF: 2 REF: 1-1 NAT: Analytic LOC: Scarcity, tradeoffs, and opportunity cost TOP: Tradeoffs MSC: Interpretive 5. Choosing not to attend a concert so that you can study for your exam is an example of a tradeoff. ANS: T DIF: 2 REF: 1-1 NAT: Analytic LOC: Scarcity, tradeoffs, and opportunity cost TOP: Tradeoffs MSC: Applicative 6. Efficiency means everyone in the economy should receive an equal share of the goods and services produced. ANS: F DIF: 2 REF: 1-1 NAT: Analytic LOC: Efficiency and Equity TOP: Equality MSC: Definitional 7. Equality refers to how the pie is divided, and efficiency refers to the size of the economic pie. ANS: T DIF: 2 REF: 1-1 NAT: Analytic LOC: Efficiency and Equity TOP: Equality | Efficiency MSC: Definitional 8. Government policies that improve equality usually increase efficiency at the same time. ANS: F DIF: 1 REF: 1-1 NAT: Analytic LOC: Efficiency and Equity TOP: Efficiency | Equality MSC: Interpretive 9. An individual deciding how to allocate her limited time is dealing with both scarcity and trade-offs. ANS: T DIF: 1 REF: 1-1 NAT: Analytic LOC: Scarcity, tradeoffs, and opportunity cost TOP: Opportunity cost MSC: Interpretative 10. The cost of an action is measured in terms of foregone opportunities. ANS: T DIF: 1 REF: 1-1 NAT: Analytic LOC: Scarcity, tradeoffs, and opportunity cost TOP: Opportunity cost MSC: Interpretive 11. Tuition is the single-largest cost of attending college for most students. ANS: F DIF: 1 REF: 1-1 NAT: Analytic LOC: Scarcity, tradeoffs, and opportunity cost TOP: Opportunity cost MSC: Interpretive 1 2 Chapter 1/Ten Principles of Economics 12. If wages for accountants rose, then accountants leisure time would have a lower opportunity cost. ANS: F DIF: 1 REF: 1-1 NAT: Analytic LOC: Scarcity, tradeoffs, and opportunity cost TOP: Opportunity cost MSC: Applicative 13. A marginal change is a small incremental adjustment to an existing plan of action.... View Full Document

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