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Homework #1
1. The father of economics and the author of the Wealth of Nations is:
A. Alan Greenspan.
B. Adam Smith
C. Adam Sandler.
D. Alec De Touquiville
E. None of the Above.
2. Economics:
A. is a subject matter that solely deals with the economy.
B. is a set of principles to explain the choices people make and the actions they take in
order to make the best use of scarce resources.
C. developed only in the last 300 years in response to emergence of markets.
D. both (A) and (B).
E. both (B) and (C).
3. Adam Smith’s steps to creating affluence include:
A. a surplus in the primary industry that is greater than the rate of growth in population
and is invested in physical and human capital.
B. the development of manufacturing that extends urbanization and fosters economies
of scale.
C. rationalization of life that demystifies tradition and enhances moral development.
D. growth of the service sector.
E. all of the above.
4. Scarcity
A. is a situation where resources are insufficient to meet all peoples wants and needs.
B. does not require a choice in a modern economy where substitution possibilities are
large.
C. and the choices that are possible can be demonstrated on a production possibility
frontier.
D. both (A) and (C).
E. all of the above.
5. The production frontier demonstrates the principle that
A. there is no such thing as a free lunch.
B. you should not cry over spilled milk.
C. life is a game of chance the skillful player will make goods moves out of bad throws.
D. all of the above.
E. none of the above.
