Questions for economic reasoning and discussion

1. Assume that you have just received your first pay of 730 hryvnias. Describe how the concepts of scarcity, opportunity costs and the need to make choices will affect the way in which you are going to spend your money.

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2. One of the scarce resources that direct our behavior is time. Each of us has only 24 hours in a day. How do you plan to allocate your time in a given day among alternatives? How do you consider the alternatives? Once you choose a most important use of time, why not spend all your time on it? Use the concept of opportunity cost in your answer.

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3. If you happen to drop out of the university, what things will change in your life? What, then, is the opportunity cost of your education?

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4. What is the difference between scarcity and poverty? If everyone in the world had enough to eat, could we say that food was no longer scarce? Can the problems of scarcity and poverty be solved?

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5. Choose the right variant. Only one is possible.

1. Scarcity

   1. is the inability to satisfy all our wants.

   2. leads to higher prices.

   3. applies only to people living in poverty.

   4. is not something that affects very rich people.

2. Which of the following statements is true?

   1. Human wants are scarce but resources are limitless.

   2. Human wants are limitless and resources are limitless.

   3. Resources are scarce but human wants are limitless.

   4. Resources are limitless but human wants are scarce.

3. Scarcity requires that we

   1. produce efficiently.

   2. learn to limit our wants.

   3. make choices about what goods and services to produce.

   4. have unlimited resources.

4. If Jon effectively uses available resources to satisfy wants, we say he

   1. does not face opportunity costs.

   2. makes a rational choice.

   3. does not compare costs and benefits.

   4. does not respond to incentives.

5. Economic choice and competitive behavior are the result of

   1. basic human greed - жадоба.

   2. poverty.

   3. private ownership of resources.

   4. scarcity.

6. What is opportunity cost?

   1. Opportunity cost refers to costs that cannot be avoided, regardless of what is done in the future, because they have already been incurred.

   2. Opportunity cost is the value of what we give up by not making the alternative choice.

   3. Opportunity cost is a cost associated with the allocation of abundant resources among alternative uses.

   4. Opportunity cost is a monetary measure of cost that takes into account only explicit costs (явні витрати), or costs that can be counted.

7. The highest-valued alternative that we give up to get something is the

   1. incentive.

   2. benefit.

   3. opportunity cost.

   4. costs.

8. The following is a rank ordering of how Ann would prefer to spend her time this evening: (1) study economics, (2) go to a concert, (3) do laundry, and (4) exercise. If she chooses to study economics, what is the opportunity cost of studying?

   1. The benefits she forgoes by not going to the concert.

   2. The sum of going to a concert, doing her laundry, and exercising.

   3. Zero.

   4. None of the above.

9. What economic fact prevents a hypothetic (гіпотетичний) nation from eliminating poverty?

   1. Everyone in a hypothetic nation has plenty of money.

   2. Scarcity.

   3. Everyone in a hypothetic nation is poor.

   4. People in a hypothetic nation are satisfied with their current standard of living.

10. Economics is a social science that studies the choices that individuals, businesses, governments, and entire societies make in the presence of

    1. scarcity.

    2. necessity.

    3. efficiency.

    4. poverty.