20. economics is best defined as the study of how societies deal with
a. the problem of scarcity.
b. the factors of production.
c. the paradox of wealth.
d. the division of labor.
21. a circular flow model shows how
a. some interactions occur in a traditional economy
b. all interactions occur in a market economy
c. all interactions occur in a traditional economy
d. some interactions occur in a market economy
22. producers sell their goods and services to consumers in the
a. factor market.
b. product market.
c. factor frontier.
d. product frontier.
23. into what four categories do economist divide factors of production?
a. resources, labor, money, and capital
b. land, labor, capital, and entrepreneurship
c. labor, capital, and entrepreneurship
d. land, labor, money, and entrepreneurship
24. when a worker learns one task very well, this is called
a. specialization.
b. paradox of value
c. productivity.
d. interdependence.
25. opportunity cost refers to
a. the value of the next best alternative.
b. the cost of not expanding production.
c. the cost of labor during production.
d. the dollar amount of a good or service.
26. when a nation’s total output increases over time, the nation is experiencing
a. decrease in gross national product.
b. economic interdependence.
c. economic growth.
d. the expansion of the possibilities curve.
27. what are the alternative choices made by consumers in the marketplace called?
a. needs
b. opportunity costs
c. services
d. trade-offs
28. “to take an example,… one man draws out the wire, another straightens it, a third cuts it, a fourth points it;…and the making of a pin is, in this manner, divided into about eighteen distinct operations.”
adam smith, the wealth of nations, 1776.
in this passage, adam smith is describing the basic economic concept of
a. opportunity cost.
b. division of labor.
c. paradox of value.
d. utility.
29. study the chart above. which of the following are examples of needs?
a. a and b
b. a and d
c. c and d
d. b and c
(chart: a: food, b: game boy, c: nike shoes, d: clothing)

Question

Accepted Answer

### Question 20
# Brief Explanations:
Economics is fundamentally about how societies address the problem of scarcity (unlimited wants vs. limited resources). Option a matches this definition. Option b (factors of production) is part of economics but not the core definition. Option c (paradox of wealth) is not the main focus, and option d (division of labor) is a concept within economics, not the definition.
# Answer:
a. the problem of scarcity.

### Question 21
# Brief Explanations:
The circular flow model in economics illustrates all economic interactions (between households and firms, in product and factor markets) in a market economy. Option b is correct as it shows all interactions in a market economy. Option a is incorrect (it's about market, not traditional). Option c is wrong (traditional economy has different interaction patterns). Option d is incorrect (it's all, not some, in a market economy).
# Answer:
b. all interactions occur in a market economy

### Question 22
# Brief Explanations:
Producers sell goods and services to consumers in the product market. The factor market is where firms buy resources. "Factor frontier" and "product frontier" are not standard terms for this context. So option b is correct.
# Answer:
b. product market.

### Question 23
# Brief Explanations:
Economists divide factors of production into land (natural resources), labor (human effort), capital (tools/machinery), and entrepreneurship (innovation/organization). Option b lists these four. Option a includes money (not a factor), option c has three (missing land), option d includes money (not a factor).
# Answer:
b. land, labor, capital, and entrepreneurship

### Question 24
# Brief Explanations:
When a worker specializes in one task (learns it well), this is specialization. Option a is correct. Paradox of value (b) is about value vs. utility, productivity (c) is about output per input, and interdependence (d) is about reliance between entities.
# Answer:
a. specialization.

### Question 25
# Brief Explanations:
Opportunity cost is the value of the next - best alternative foregone. Option a is the correct definition. Option b (cost of not expanding production) is not opportunity cost. Option c (labor cost in production) is a production cost, not opportunity cost. Option d (dollar amount of a good/service) is price, not opportunity cost.
# Answer:
a. the value of the next best alternative.

### Question 26
# Brief Explanations:
When a nation's total output (GDP/GNP) increases over time, it's economic growth. Option c is correct. Option a is a decrease, option b (economic interdependence) is about reliance between economies, option d (expansion of possibilities curve) is related to growth potential but not the same as actual output increase.
# Answer:
c. economic growth.

### Question 27
# Brief Explanations:
Trade - offs are the alternative choices consumers make in the marketplace (giving up one thing for another). Needs (a) are basic requirements, opportunity costs (b) are the cost of the next - best alternative, and services (c) are a type of good. So option d is correct.
# Answer:
d. trade - offs

### Question 28
# Brief Explanations:
Adam Smith's passage describes division of labor, where production is split into multiple specialized tasks. Option b is correct. Opportunity cost (a) is about alternatives, paradox of value (c) is about value vs. utility, and utility (d) is about satisfaction from a good/service.
# Answer:
b. division of labor.

### Question 29
# Brief Explanations:
Needs are essential for survival (food, clothing). Wants are non - essential (Game Boy, Nike Shoes). So food (a) and clothing (d) are needs. Option b (a and d) is correct.
# Answer:
b. a and d

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