The primary objective of economics is
A) to learn how to create more resources.
B) to study how people make choices with limited resources.
C) to learn how to make the most profits with a given amount of resources.
D) to study why some people are never happy with the resources they have.
Answer: B
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While the classicists believed that both velocity and output are stable, Keynesians believe
A local newspaper headline states "Congress Votes Against President's Proposed Tax Increase." An economist would interpret the statement as
A) a sad event, because all economists favor tax cuts. B) uninteresting, because all economists favor theories instead of reality. C) a purely political issue not related to economics. D) a shorthand way of saying, "More individuals in Congress voted against the tax cut compared to the number of individuals who voted in favor of the tax cut."
If your total revenue is $10 million, your variable costs are $8 million, and your fixed costs are $20 million, in the short run you will
A. operate. B. shut down. C. go out of business.
Based on the theory of purchasing power parity, in the long run, currencies of countries with significant inflation will tend to:
A. be flexible. B. depreciate. C. appreciate. D. have nominal exchange rates.