The fundamental goal of economics is to
A. provide all people with five yachts and two automobiles.
B. redistribute income and eliminate poverty.
C. reduce unemployment so that welfare payments are not necessary.
D. learn to handle the scarcity of virtually all resources.
Answer: D
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If an economy maintains a small rate of growth for a long period of time, then the size of the economy:
A. can increase by a large amount. B. can only increase by a small amount. C. will stay nearly constant. D. can never double.
The ceteris paribus assumption means
A) favors are returned in kind. B) this is the proof of the matter. C) from many, one. D) other things are equal.
Which of the following statements is TRUE about the optimal quantity of pollution?
A) It equals zero. B) Pollution abatement should continue up to the point where marginal cost equals the average total cost. C) Trade-offs exist between producing a cleaner environment and producing other goods and services. D) Firms should be allowed to determine the profit-maximizing amount of pollution abatement.
Which of the following is an example of scarcity, rather than shortage?
a) A popular toy is sold out during the busy holiday season b) You have spent your last penny and payday is a week away c) A person wants an endless supply of everything but cannot have it d) Gasoline was rationed in America during World War II