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1. | In economics, "needs" refer to __________
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| a) the basic, minimal things people must have to survive.
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| b) things that people do not have.
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| c) luxuries such as new televisions, computers, and VCRs.
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| d) a good education and adequate health care.
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2. | Scarcity of resources is always present because __________
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| a) there will always be natural disasters to affect the production of goods and services.
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| b) we live in a world where poverty still exists.
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| c) people are not willing to change their unlimited wants.
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| d) competing alternative uses for resources always exist.
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3. | The main factors necessary for the production of goods and services are __________
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| a) land, labor, capital, and services.
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| b) capital, land, entrepreneurship, and labor.
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| c) labor, capital, land, and natural resources.
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| d) human resources, labor, capital, and land.
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4. | If your city made a trade-off to spend $1 million on a recycling facility instead of a fitness and health center, the opportunity cost of a cleaner environment would be __________
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| a) fewer employed people.
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| b) less garbage to dispose of.
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| c) fewer colleges and universities.
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| d) fewer fit and healthy people.
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5. | A production possibilities curve is used by economists to show __________
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| a) people and businesses how much of each item to produce.
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| b) the maximum combinations of goods and services that can be produced from a fixed amount of resources in a given period of time.
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| c) the trade-offs and opportunity costs of producing possible combinations of goods.
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| d) all of the above.
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6. | Which of the following statements is NOT true about the use of economic models?
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| a) Economic models can simulate what would happen in the real world given certain economic circumstances.
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| b) There may be many economic models for a particular problem.
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| c) Economists use economic models to make value judgements about economic decisions.
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| d) Economic models cannot predict all the factors that might influence people's behavior.
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7. | Economists do not all agree on the same solutions to problems because __________
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| a) they have differing opinions, beliefs, and social views.
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| b) their views are dictated by their governments.
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| c) they deal with facts, and the facts change.
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| d) individual human behavior is not always predictable.
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