Profit is the payment made for land resources.
a. True
b. False
QUESTION 2An economist would classify 100 shares of Apple Computer stock as capital.
a. True
b. False
QUESTION 3Economics
a. studies human behavior when scarcity exists and choices must be made
b. provides the only reasonable explanation of how people make decisions
c. can accurately explain all human behavior since it is based on the assumption of rationality
d. is better at showing the way things ought to be than the other social sciences are
e. is the only social science that can explain the existence and behavior of public institutions
QUESTION 4Michigan has an abundant supply of fresh water. However, an economist would consider it a scarce resource because
a. water is necessary for humans' physical survival
b. pollution will eventually destroy all life in the Great Lakes
c. water is limited relative to people's unlimited wants
d. water commands a very high price
e. nature can destroy water as well as create it
QUESTION 5Economics is best described as the
a. study of choice when scarcity exists
b. study of the production of goods and services
c. theory of consumer behavior
d. science of money
e. art of spending money wisely
QUESTION 6Economics is the study of
a. how the human race differs from other species
b. how individuals amass personal fortunes in the stock market
c. how individuals and nations deal with the problem of scarcity
d. role that money plays in the economy
e. how goods and services are distributed throughout the world
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