Scarcity means that
A) what we can produce with our resources is greater than our material wants.
B) resources are unlimited.
C) wants are greater than what we can produce with our resources.
D) governments must make up for shortages in resources.
E) choices made in self-interest cannot be the same as those made in the social interest.
C
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Which of the following best describes the substitution effect caused by a price increase?
a. A change in consumption due to the fact that you will not buy goods whose marginal value is below the new price. b. A change in consumption due to the fact that you cannot afford your original market basket. c. A smaller percentage change in quantity than in price. d. A larger percentage change in quantity than in price.
In the long run, if the prices of goods and services are higher than before the aggregate quantity:
A. supplied will be higher. B. demanded will be lower. C. supplied will not change. D. demanded will be higher.
The production possibilities curve shows:
A. the maximum amount of one good that can be produced for every possible production level of the other good. B. how increasing the resources used to produce one good increases the production of the other good. C. how increasing the production of one good allows production of the other good to also rise. D. the minimum amount of one good that can be produced for every possible production level of the other good.
The area above the market supply curve and below the market price
A) is equal to the total cost of production.
B) is equal to the total amount of producer surplus in a market.
C) is equal to the total amount of economic surplus in a market.
D) is equal to the marginal cost of the last unit produced.