TEST BANK
The Macro Economy Today
BRADLEY SCHILLER, KAREN GEBHARDT
15th Edition
,Student name:
TRUE/FALSE - Write 'T' if the statement is true and 'F' if the statement is false.
1) Scarcity results when available resources cannot satisfy all desired uses of
those resources.
⊚ true
⊚ false
2) Critics of government regulation argue that government interference in the
marketplace stifles the "animal spirits" of entrepreneurship.
⊚ true
⊚ false
3) Opportunity cost is a theoretical concept with no practical application.
⊚ true
⊚ false
4) Every time we use scarce resources in one way, we give up the opportunity to use them
in other ways.
⊚ true
⊚ false
5) Production possibilities in an economy decrease as more resources and better
technology are utilized.
⊚ true
⊚ false
6) All output combinations that lie outside a production possibilities curve are
attainable with available resources and technology.
⊚ true
⊚ false
Version 1 2
,7) Output combinations that lie inside the production possibilities curve are characterized
by efficient use of resources.
⊚ true
⊚ false
8) If the economy is inside the production possibilities curve, then more output can
be produced using existing resources.
⊚ true
⊚ false
9) All economies must make decisions concerning what to produce, how to produce it,
and for whom to produce.
⊚ true
⊚ false
10) The essential feature of the market mechanism is the price signal.
⊚ true
⊚ false
11) Government failure occurs when government intervention fails to improve economic
outcomes or makes them worse.
⊚ true
⊚ false
12) Microeconomics is concerned with individual performance as well as the economy as a
whole.
⊚ true
⊚ false
Version 1 3
, 13) The Latin phrase ceteris paribus refers to holding other variables constant.
⊚ true
⊚ false
14) To calculate the slope of a line, find the vertical distance between two points and divide
it by the horizontal distance between the same two points.
⊚ true
⊚ false
15) The slope of a production possibilities curve is positive.
⊚ true
⊚ false
16) When a curve shifts, the underlying relationship between the two variables has changed.
⊚ true
⊚ false
MULTIPLE CHOICE - Choose the one alternative that best completes the statement or answers
the question.
17) Which of the following is not one of the three core economic issues that must
be resolved?
A) How to produce the goods and services we select.
B) What to produce with unlimited resources.
C) Who should get the goods and services we produce.
D) What to produce with limited resources.
18) The fundamental problem of economics is
Version 1 4
The Macro Economy Today
BRADLEY SCHILLER, KAREN GEBHARDT
15th Edition
,Student name:
TRUE/FALSE - Write 'T' if the statement is true and 'F' if the statement is false.
1) Scarcity results when available resources cannot satisfy all desired uses of
those resources.
⊚ true
⊚ false
2) Critics of government regulation argue that government interference in the
marketplace stifles the "animal spirits" of entrepreneurship.
⊚ true
⊚ false
3) Opportunity cost is a theoretical concept with no practical application.
⊚ true
⊚ false
4) Every time we use scarce resources in one way, we give up the opportunity to use them
in other ways.
⊚ true
⊚ false
5) Production possibilities in an economy decrease as more resources and better
technology are utilized.
⊚ true
⊚ false
6) All output combinations that lie outside a production possibilities curve are
attainable with available resources and technology.
⊚ true
⊚ false
Version 1 2
,7) Output combinations that lie inside the production possibilities curve are characterized
by efficient use of resources.
⊚ true
⊚ false
8) If the economy is inside the production possibilities curve, then more output can
be produced using existing resources.
⊚ true
⊚ false
9) All economies must make decisions concerning what to produce, how to produce it,
and for whom to produce.
⊚ true
⊚ false
10) The essential feature of the market mechanism is the price signal.
⊚ true
⊚ false
11) Government failure occurs when government intervention fails to improve economic
outcomes or makes them worse.
⊚ true
⊚ false
12) Microeconomics is concerned with individual performance as well as the economy as a
whole.
⊚ true
⊚ false
Version 1 3
, 13) The Latin phrase ceteris paribus refers to holding other variables constant.
⊚ true
⊚ false
14) To calculate the slope of a line, find the vertical distance between two points and divide
it by the horizontal distance between the same two points.
⊚ true
⊚ false
15) The slope of a production possibilities curve is positive.
⊚ true
⊚ false
16) When a curve shifts, the underlying relationship between the two variables has changed.
⊚ true
⊚ false
MULTIPLE CHOICE - Choose the one alternative that best completes the statement or answers
the question.
17) Which of the following is not one of the three core economic issues that must
be resolved?
A) How to produce the goods and services we select.
B) What to produce with unlimited resources.
C) Who should get the goods and services we produce.
D) What to produce with limited resources.
18) The fundamental problem of economics is
Version 1 4
