1.01 The Basic Language of Economics

Try It

Scarcity/C-BA Review

Answer the following questions to check your understanding of major concepts from the lesson.

1. Is nuclear waste a resource?
   1. Yes
   2. No

   Answer: b. No, it is not desirable so it is not a resource.

2. What two goods are free?
   1. Air and sunshine
   2. Capital and labor
   3. Oil and sunshine
   4. Air and oil

   Answer: a. Air and sunshine

3. If the marginal benefits are greater than the marginal costs, will you do that activity?
   1. Yes
   2. No

   Answer: a. Yes. You would do an activity if the marginal benefits are greater than the marginal costs.

4. If the marginal costs are greater than the marginal benefits, will you do that activity?
   1. Yes
   2. No

   Answer: b. No. You would not do this activity if the marginal costs are greater than the marginal benefits.

5. Is sunshine scarce?
   1. Yes
   2. No

   Answer: b. No, it is not limited so it is not scarce.

6. Is a taxi a good or a service?
   1. A good
   2. A service
   3. Both

   Answer: c. Both. A taxi is a good to the taxi company but it provides a service to customers.

7. Economics is the study of money. True or False?
   1. True
   2. False

   Answer: b. False. Economics is the study of scarcity and choice.