Question: Scarcity Problem

Answer: persists because economic wants exceed available productive resources.

Question: Opportunity Cost

Answer: Suppose that a university decides to spend $1 million to upgrade personal computers and scientific equipment for faculty rather than spend $1 million to expand parking for students. This example illustrates

Question: In analyzing human decision and action, economists assume that

Answer: People's behavior reflects rational self-interest

Question: Given the production possibilities schedule above, a combination of 3 tanks and 350 cars

Answer: is attainable but entails some unemployment or inefficient use of society's resources.

Question: When economists describe "a market," they mean

Answer: any place where, or mechanism by which, buyers and sellers interact to trade goods, services, or resources.

Question: Without specialization, countries would have _________ goods.

Answer: Fewer

Question: Which of the following is NOT a result of specialization?

Answer: One-Sided Benefits

Question: In a market, buyers want to pay the _____ possible price and sellers want to charge the _____ possible price.

Answer: Lowest, Highest

Question: Prices usually allocate resources efficiently because they allocate

Answer: resources to the highest value good or service.

Question: An increase in the demand for washing machines might be caused by

Answer: an expected increase in the price of washing machines.

Question: If a price floor is set above the equilibrium price in a market

Answer: the quantity supplied will exceed the quantity demanded.

Question: How might a problem like the Bird Flu which can make thousands of birds sick and scare consumers about possible problems with eating items like chicken or eggs affect the market for chicken?

Answer: Quantity decreases and price is indeterminate