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UTK Notes


BR1A: Bridge: Exploring Economics

Question 1

Because of scarcity:

A. wants are limited.
B. choices are unlimited.
C. we face tradeoffs in nearly every choice we make.
D. resources are limitless.

Hint Something is scarce if there is an insufficient amount.
Answer C. we face tradeoffs in nearly every choice we make. Scarcity causes tradeoffs in nearly every choice we make. There are limited resources to satisfy out unlimited wants.

Question 2

What is the main problem addressed with scarcity?

A. Determining how to address unlimited wants with limited resources.
B. Making sure that critical resources such as oil and forests are not depleted.
C. Trying to satisfy the basic needs of everyone to eliminate poverty.
D. Ensuring that an adequate standard of living is achieved.

Hint Something is scarce if there is an insufficient amount.
Answer A. Determining how to address unlimited wants with limited resources. Scarcity causes everyone to face trade-offs because people have unlimited wants, but only limited resources.

Question 3

You see a large group of stranded passengers standing next to a disabled bus, and you have only three seats in your car. You have to decide which three passengers to rescue because of:

A. scarcity.
B. efficiency.
C. trade.
D. macroeconomics.

Hint Something is scarce if there is an insufficient amount.
Answer A. scarcity. The number of seats in your car is scarce. You only have three seats and more passengers than you can carry.

Question 4

Which of the following words best describes what economics is about?

A. Choices
B. Happiness
C. Growth
D. Money

Hint Scarcity and trade-offs are at the heart of economic study.
Answer A. Choices. Economics is about the choices people make because of scarcity. Economics studies both the individual choices and how those choices add up to form the macroeconomy.

Question 5

Which of the following would be most closely related to microeconomics?

A. The effect of improving consumer confidence on economic growth.
B. How rising wages affect the choice of working instead of going to school.
C. How rising prices cause standards of living to fall.
D. The extent to which people leaving the labor force affects unemployment.

Hint Microeconomics typically investigates the behavior and attributes of the smallest possible economic actor such as the person or firm.
Answer B. How rising wages affect the choice of working instead of going to school. The impact of rising wages on work choices is a microeconomic topic since it focusses on the choices of the individual and not how the entire aggregate economy is affected by rising wages which would be a macroeconomic topic.