Answer:
1.Economics is the social science dedicated to the study of
answer: how scarce resources are allocated by different economic systems
2.The following statement is from New York City's Parking Regulations page:
"All of New York City is a designated Tow Away Zone under the State's Vehicle and Traffic Law. This means that any vehicle parked or operated illegally, or with missing or expired registration or inspection stickers, may be towed."
Based off this statement, what economic concept best explains why most New Yorkers park correctly?
answer: People respond to incentives in a predictable manner. New Yorkers will park legally to prevent their cars from being towed.
3. Which of the following reasons for starting a store is most closely related to an entrepreneur's motivation for innovation?
answer: A computer programmer creates a new computer game that uses new technology to help children with speech impediments.
4.The next best alternative given up when individuals, businesses, and governments confront scarcity by making choices is known as ___.
answer: opportunity cost
5. Bob owns a glass manufacturing company. His factories contain machines that heat sand up to 2300 degrees Fahrenheit. The machines then place melted sand into casts to form bowls, jars, and other glass products. Workers package these products for shipping.
Using the above information, correctly identify examples of the productive resources.
answer:land-sand, human resources- factory workers, physical capital-casts, entrepreneur- Bob
6.The BEST example of a shortage is limited amounts of
answer: food available because the trucks carrying it are on strike.
7. Which of the following is the BEST example of scarcity, rather than shortage?
answer:An electric company wants an endless supply of coal for their company.
8.Nicholas starts a taxi cab business. He buys a garage, hires three drivers, buys two taxi-cabs, and sends his cab drivers to driving school for better driving skills and road knowledge. What action(s) represents CAPITAL investment?
*Remember, capital can refer to physical or human capital.
answers: the purchased taxi cabs and the purchased garage
9.What is a rational economic decision?
answer: one in which marginal benefits are greater than marginal costs
10.The economic term “scarcity” relates MOST directly to a situation in which
answer: manufacturers lack unlimited raw materials needed to create their product
