Test Bank for Macroeconomics, 4th Canadian Edition by Glenn Hubbard

Test Bank for Macroeconomics 4th Canadian Edition Hubbard
All Chapters included

Macroeconomics, 4Ce (Hubbard)
Chapter 1 Economics: Foundations and Models

1.1 Explain these three key economic ideas: People are rational, people respond to incentives,
and optimal decisions are made at the margin

1) Changes in global weather pa3erns can lead to
A) more Canadians drinking coffee.
B) Canadians having to pay more for coffee.
C) wage increases for coffee shop employees.
D) the destruction of the Canadian coffee harvest.
E) Canadians demanding more coffee.
Answer: B
Diff: 1 Type: MC
Topic: Scarcity
Learning Outcome: 1.1 Explain these three key economic ideas: People are rational, people respond to
incentives, optimal decisions are made at the margin
AACSB: Reflective Thinking
Special Feature: Chapter Opener: You versus Caffeine?

2) The study of economics arises due to
A) money.
B) scarcity.
C) greed.
D) unlimited resources.
E) unemployment.
Answer: B
Diff: 1 Type: MC
Topic: Scarcity
Learning Outcome: 1.1 Explain these three key economic ideas: People are rational, people respond to
incentives, optimal decisions are made at the margin
AACSB: Analytic Skills

3) Scarcity refers to the situation in which
A) unlimited wants exceed limited resources.
B) unlimited resources exceed limited wants.
C) a country's population is larger than its resource base.
D) a nation's poverty level increases faster than its population.
E) our needs and wants are finite.
Answer: A
Diff: 1 Type: MC
Topic: Scarcity
Learning Outcome: 1.1 Explain these three key economic ideas: People are rational, people respond to
incentives, optimal decisions are made at the margin
AACSB: Analytic Skills




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