Part 1

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1. What is “scarcity” in economics? Choose the correct answer:

----a)Our wants exceed our resourcesb)Unlimited resourcesc)Limited wants

2. “Economics” is the study of how best to allocate scarce resources among competing or alternative uses.

3. What is "economics" all about? Choose the correct answer:

----a)The first goal of economic theory is to help society find better answers to the three basic questionsb)Economic theory predicts climate changec)Economics is the study of how people have the right to change government policies or market institutions

4. Which are the "three basic economic questions"? Choose the correct answer:

----a)What to produce? How to produce? And for whom to produce?b)What to produce? Where to produce? And how much to produce?c)What to produce? How to produce? And which method to use to produce?

5. "Factors of production" are: natural resources, labour, capital and entrepreneurship.

6. The difference between the GDP and the so-called "per capita GDP" is that this second concept accounts for the nation's output divided by the total population.

7. "Inflation" is a sustained in the general price level of goods and services in an economy over a period of time.

8. What type of economic behaviour does "microeconomics" study?

9. What type of economic behaviour does "macroeconomics" study?

10. The law of Demand and Supply says, "The higher the price, the lower the quantity demanded. The curve is a downward slope".