Resources and Scarcity Quiz

Economics is probably BEST defined as the study of how...

• resources are apportioned to satisfy human wants.
• modern businesses have grown and prospered.
• capitalism has survived in today’s world.
• various societies have dealt with unemployment and inflation.

Adam Smith, author of The Wealth of Nations, is often called the father of modern economics. Over the past 200 years Smith’s influence on current economic thinking is indisputable. Basically, Smith held that specialization...

• would lead to severe economic problems by promoting self-interest.
• was desirable but unworkable in a capitalistic society.
• could function only given proper regulation by government.
• was essential to efficient use of resources.

Economic models are sometimes harder to validate than scientific models MAINLY because...

• so much more is known about science than about economics.
• science is totally objective, whereas much of economics is subjective.
• the public is far more skeptical about economic theory than about scientific theory.
• the variables in economics are often beyond the economists’ control.

Which of the following statements is MOST accurate? Government regulation of industry in the American economy today is...

• the subject of much debate and controversy.
• generally accepted as the only means of decentralizing economic power.
• largely a thing of the past, thanks to the theories of Adam Smith.
• just beginning to gain acceptance under the Reagan administration.