Question: Economics is the study of how societies with limited resources decide what to produce, how to produce and for whom to produce. What, how, and for whom to produce are problems all over the world because human needs are practically unlimited, but all societies have only limited quantities of resources that can be used to produce goods or services. A knowledge of basic economics is important for understanding both the problems and opportunities that will face the world economy in the 21st century. As a student of economics, one will have the chance to discover how commerce , government policies, and day-to-day decisions made by consumers affect his living standards. The study of economics can help him understand the influence of such events as the move to free markets in prefix = st1 /PolandandRussia, or of ups and downs in interest rate and the foreign exchange rate. Economics is influenced by developments in the many different areas of business, politics, science, nature, religion and history. And whether or not one is aware of it, economics is an important part of his life. From a practical point of view, one's study of economics will help improve his decision-making skills. He learns a logical way to compare different courses of action. As he studies the concept of opportunity cost, for instance, he will discover that every choice he makes has both a benefit and a cost. Suppose someone decides to get a part-time job so he can earn enough money to buy a car. He will have the benefit of owning the car, but he will pay a cost in terms of the leisure hours he gives up for working so as to pay for the car and keep it in good condition. After weighing his choice in cost-benefit terms, he may decide he does not need a car any more. Why does the person have to give up leisure hours in the example of buying a car? A) Because he has to spend some time in the car. B) Because he has to work extra hours to get the money. C) Because he is busy working for his boss. D) Because keeping a car in good condition takes much time.
Answer:
B