Description
Macroeconomics, Canadian Ed. (Hubbard et al.)
Chapter 1 Economics: Foundations and Models
1.1 Three Key Economic Ideas
1) Bad weather in Colombia can lead to
A) more Canadians drinking coffee.
B) Canadians having to pay more for coffee.
C) wage increases for coffee shop employees.
D) the destruction of the Canadian coffee harvest.
Answer: B
Diff: 1 Type: MC Page Ref: 3
Topic: Scarcity
Learning Outcome: 1.1 Explain these three key economic ideas: People are rational, people
respond to incentives, and optimal decisions are made at the margin
AACSB: Reflective Thinking
Special Feature: Chapter Opener: You versus Caffeine?
2) In economics, choices must be made because we live in a world of
A) unemployment.
B) scarcity.
C) greed.
D) unlimited resources.
Answer: B
Diff: 1 Type: MC Page Ref: 4
Topic: Scarcity
Learning Outcome: 1.1 Explain these three key economic ideas: People are rational, people
respond to incentives, and optimal decisions are made at the margin
AACSB: Reflective Thinking
Special Feature: None
3) Which of the following statements is true about scarcity?
A) Scarcity refers to the situation in which unlimited wants exceed limited resources.
B) Scarcity is not a problem for the wealthy.
C) Scarcity is only a problem when a country has too large a population.
D) Scarcity arises when there is a wide disparity in income distribution.
Answer: A
Diff: 1 Type: MC Page Ref: 4
Topic: Scarcity
Learning Outcome: 1.1 Explain these three key economic ideas: People are rational, people
respond to incentives, and optimal decisions are made at the margin
AACSB: Reflective Thinking
Special Feature: None
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