1.Resource allocation*

• is the study of the causes and consequences of the allocation of resources as it is affected by the workings of the price system.
• is the value of the next best alternative that is forgone when one alternative is chosen.
• is the study of the determination of economic aggregates such as total output, employment, and growth
• determines the quantities of various goods that are produced

2.Economists use the term "demand" as:*

• a schedule of various combinations of market prices and amounts demanded.
• an upsloping line on a graph which relates consumer purchases and product price.
• a particular price-quantity combination on a stable demand curve.
• the total amount spent on a particular commodity over a stipulated time period.

3.Microeconomics*

• is the value of the next best alternative that is forgone when one alternative is chosen.
• is the study of the causes and consequences of the allocation of resources as it is affected by the workings of the price system.
• determines the quantities of various goods that are produced
• is the study of the determination of economic aggregates such as total output, employment, and growth

4.If a theory is in conflict with facts, it will usually be amended to make it consistent with those facts, or it will be discarded to be replaced by a superior theory.*

• True
• False

5.Normative economics*

• the total amount that consumers desire to purchase in some time period
• focuses on the ideological, opinion-oriented, prescriptive, value judgments, and "what should be" statements aimed toward economic development, investment projects, and scenarios
• represent the benefits an individual, investor or business misses out on when choosing one alternative over another
• is a stream of economics that focuses on the description, quantification, and explanation of economic developments, expectations, and associated phenomena.

6.The demand curve shows the relationship between*

• consumer tastes and the quantity demanded
• money income and quantity demanded.
• price and production costs.
• price and quantity demanded.

7.Positive economics*

• is a stream of economics that focuses on the description, quantification, and explanation of economic developments, expectations, and associated phenomena.
• the total amount that consumers desire to purchase in some time period
• focuses on the ideological, opinion-oriented, prescriptive, value judgments, and "what should be" statements aimed toward economic development, investment projects, and scenarios
• represent the benefits an individual, investor or business misses out on when choosing one alternative over another

8.A market is in equilibrium*

• when there is a surplus of the product in the market.
• whenever the demand curve is downsloping and the supply curve is upsloping.
• a shortage of 100 units.
• if the amount producers want to sell is equal to the amount consumers want to buy.
• at all prices above that shown by the intersection of the supply and demand curves.

9.Economics is the study of the use of scarce resources to satisfy unlimited human wants.*

• True
• False

10.When price falls, quantity demanded ______

11.Capital includes all mental and physical human resources, including entrepreneurial capacity and management skills.

• True
• False

12.Resource allocation*

• is the value of the next best alternative that is forgone when one alternative is chosen.
• is the study of the causes and consequences of the allocation of resources as it is affected by the workings of the price system.
• is the study of the determination of economic aggregates such as total output, employment, and growth
• determines the quantities of various goods that are produced