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Ch.01 ! 1 " # 9 " (63 $ ) %&’()* +,)- ! .$ !/0 +,12345 67$ 1) Who, in a modern mixed economy, decides what goods and services will be produced with the scarce resources available? 1) _______ A) Producers B) Consumers C) The government D) All of the above 2) Which of the following is correct about the economic decisions consumers, firms, and the government have to make? 2) _______ A) Each faces the problem of scarcity of trading one good for another. B) Firms and the government face scarcity, individuals do not. C) Each faces a different type of economic decision. D) Only individuals face scarcity, firms and the government do not. 3) What forces humans to make tradeoffs? 3) _______ A) Scarcity B) Productive inefficiency C) Confusion D) Risk 4) The study of economics arises due to: 4) _______ A) resources. B) scarcity. C) greed. D) money. 5) The government makes all economic decisions in a: 5) _______ A) free economy. B) mixed economy. C) market economy. D) centrally planned economy. 6) What is an economic model? 6) _______ A) A description of an economic issue that includes all possible related information. B) A simplified version of some aspect of economic life used to analyze an economic issue. C) A detailed version of some aspect of economic life used to analyze an economic issue. D) A description of an economic issue based on official government information. 7) Which of the following is part of an economic model? 7) _______ A) Norms B) Assumptions C) Opinions D) All of the above 8) Which of the following is an example of an economic trade - off that a profit - making firm has to make? 8) _______ A) Whether a firm should produce more of its product. B) Whether it is cheaper for a firm to outsource the production of a good or service.
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Ch.01 ! 2 " # 9 " (63 $ ) C) Whether it is cheaper for a firm to produce with more machines or more workers. D) All of these examples involve businesses having to make an economic trade - off decision. 9) Scarcity: 9) _______ A) is only a problem when a country has too large a population. B) is due to unlimited wants and limited resources. C) is not a problem for the wealthy. D) all of the above. 10) Who receives the most of what is produced in a market economy? 10) ______ A) Lawmakers and other politically favored groups B) People who earn the highest incomes C) Those willing and able to buy them D) Everyone receives an equal amount 11) The relationship between rainfall and height of grass grown is: 11) ______ A) a direct relationship. B) independent. C) an inverse relationship. D) a negative relationship. 12) Which of the following is correct? 12) ______ A) Anytime you have to decide which action to take you are facing an economic tradeoff. B) Every individual, no matter how rich or poor, is faced with making tradeoffs.
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This note was uploaded on 08/18/2009 for the course ECO 220 taught by Professor Morris during the Fall '09 term at Owensboro Community and Technical College.

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Ch.01-1 - Ch.01 %&'()*! +,)-!.$! ! !/0! +,12345! ! ! !...

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