Which of the following statements is TRUE about scarcity?
A) Both rich and poor people face the problem of scarcity.
B) Scarcity exists only when supply is insufficient to meet demand.
C) Scarcity exists only when a shortage exists.
D) Scarcity can be eliminated when a country becomes richer.
Answer: A
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Suppose a tax is imposed on a good. This will
A) increase the price paid by the buyer and decrease the price received by the seller. B) increase the price paid by the buyer but leave the price received by the seller unchanged. C) decrease the price received by the seller but leave the price received by the buyer unchanged. D) increase the price received by the seller and decrease the price paid by the buyer.
Isoquants that are downward-sloping straight lines imply that the inputs
A) are perfect substitutes. B) are imperfect substitutes. C) cannot be used together. D) must be used together in varying proportions.
Conglomerate mergers provide each firm in the merger with some security against high industry risk. If one part of the merged firm suffers losses because of weak market demand,
a. the losses can be hidden in accounting techniques due to the larger and more complex nature of the company b. it can quickly get rid of the weak part of the conglomerate by selling off the assets c. other firms in the industry that did not merge with unrelated firms will have losses also d. the merger will have been proven to be a failure e. the merged firm will suffer but its impact on the firm will be more moderate than it would have been on the non-merged firms in the weak-market industry
What kind of relationship appears to actually exist, if one examines the actual data regarding the inflation rate and the unemployment rate for all years since 1953?
A) a direct relationship B) a one-to-one relationship C) an inverse relationship D) no relationship in the long run