A) We do not have sufficient resources to produce all the goods and services we want.

B) The wants of people are limited.

C) There must be poor people in rich countries.
D) Shortages exist in nearly all markets.

2. You can spend $100 on either a new economics textbook or a new CD player. If you choose to buy
the new economics textbook, the opportunity cost is:
A) $100.
B) your enjoyment of the new CD player.
C) both the $100 and the your enjoyment of the new CD player.
D) impossible to determine.

3. A key theme fundamental to all of economics is:

A) There are limited wants.
B) We are a rich country but are simply not aware of it.
C) People have unlimited wants facing limited means to satisfy them.
D) There are unlimited resources.

4. A college student waits in line for hours to purchase a ticket to the Rose Bowl, but an attorney does
not. Rather than spend hours in line, he purchases a much more expensive ticket through a ticket
broker. Why?

5. Khalil is offered a free ticket to the opera. His opportunity cost of going to the opera is:
A) zerothe tickets were free.
B) the price listed on the ticket.
C) whatever Khalil would have done had he not gone to the opera.
D) the price listed on the ticket or whatever Khalil would have done had he not gone to the opera.

6. Scarcity exists when:

A) making choices among two or more alternatives is not necessary.
B) individuals can have more of any good.
C) individuals can have more of one good but only at the expense of another.
D) resources are unlimited.

7. The cost of going to college is:

A) tuition and the cost of housing.
B) tuition, the cost of housing, and the cost of books.
C) tuition, the cost of books, and forgone income.
D) forgone income only.

201209 1 PRACTICE PROBLEMS: INTRODUCTION