Problem 1: The problem of determining what goods and services society should produce
a. exists because we can produce more than we need or want
b. exists because they are not enough resources to provide all the goods and services that people want to purchase
c. would not exist if all goods and service were scarce
d. would not exist if government owned all of the resources.
Problem 2: Specialization and trade usually lead to
a. lower economic growth
b. the exchange of goods and service in markets
c. lower living standards
d. higher prices
Problem 3: The models used in economics
a. are usually limited to variables that are directly related
b. are essentially not reliable because they are not testable in the real world
c. are of necessity unrealistic and not related to the real world
d. emphasize basic relationships by abstracting from complexities in the everyday world