Principles of Microeconomics 8th Edition by N. Gregory Mankiw

,1. The English word that comes from the Greek word for "one who manages a household" is
a. market.
b. consumer.
c. producer.
d. economy.
ANSWER: d
DIFFICULTY: Easy
LEARNING OBJE ECON.MANK.012 - Apply basic, economic principles of individual decision making that
CTIVES: determine how an economy generally works.
TOPICS: Economic thinking
KEYWORDS: BLOOM'S: Knowledge
CUSTOM ID: 001.01.0 - MC - MANK08

2. The word “economy” comes from the Greek word oikonomos, which means
a. “environment.”
b. “production.”
c. “one who manages a household.”
d. “one who makes decisions.”
ANSWER: c
DIFFICULTY: Easy
LEARNING OBJE ECON.MANK.012 - Apply basic, economic principles of individual decision making that
CTIVES: determine how an economy generally works.
TOPICS: Economic thinking
KEYWORDS: BLOOM'S: Knowledge
CUSTOM ID: 002.01.0 - MC - MANK08

3. Resources are
a. scarce for households but plentiful for economies.
b. plentiful for households but scarce for economies.
c. scarce for households and scarce for economies.
d. plentiful for households and plentiful for economies.
ANSWER: c
DIFFICULTY: Easy
LEARNING OBJE ECON.MANK.012 - Apply basic, economic principles of individual decision making that
CTIVES: determine how an economy generally works.
TOPICS: Economic thinking
Scarcity
KEYWORDS: BLOOM'S: Comprehension
CUSTOM ID: 003.01.0 - MC - MANK08

4. In considering how to allocate its scarce resources among its various members, a household considers
a. each member’s abilities.
b. each member’s efforts.
c. each member’s desires.
d. All of the above are correct.
ANSWER: d

Copyright Cengage Learning. Powered by Cognero. Page 1

,DIFFICULTY: Easy
LEARNING OBJE ECON.MANK.012 - Apply basic, economic principles of individual decision making that
CTIVES: determine how an economy generally works.
TOPICS: Economic thinking
Scarcity
KEYWORDS: BLOOM'S: Comprehension
CUSTOM ID: 004.01.0 - MC - MANK08

5. Fundamentally, economics deals with
a. scarcity.
b. money.
c. poverty.
d. banking.
ANSWER: a
DIFFICULTY: Easy
LEARNING OBJE ECON.MANK.012 - Apply basic, economic principles of individual decision making that
CTIVES: determine how an economy generally works.
TOPICS: Economic thinking
Scarcity
KEYWORDS: BLOOM'S: Knowledge
CUSTOM ID: 005.01.0 - MC - MANK08

6. Which of the following is correct?
a. The word economy comes from the Greek word for “rational thinker.”
b. Economists study the management of scarce resources.
c. Because economists believe that people pursue their best interests, they are not interested in how people
interact.
d. All of the above are correct.
ANSWER: b
DIFFICULTY: Easy
LEARNING OBJECTIVES: ECON.MANK.024 - Classify the different functions an economist may serve.
TOPICS: Economic thinking
Scarcity
KEYWORDS: BLOOM'S: Knowledge
CUSTOM ID: 006.01.0 - MC - MANK08

7. The overriding reason why households and societies face many decisions is that
a. resources are scarce.
b. goods and services are not scarce.
c. incomes fluctuate with business cycles.
d. people, by nature, tend to disagree.
ANSWER: a
DIFFICULTY: Moderate
LEARNING OBJE ECON.MANK.012 - Apply basic, economic principles of individual decision making that
CTIVES: determine how an economy generally works.
TOPICS: Economic thinking
Scarcity
Copyright Cengage Learning. Powered by Cognero. Page 2

, KEYWORDS: BLOOM'S: Comprehension
CUSTOM ID: 007.01.0 - MC - MANK08

8. A society allocates its scarce resources to various uses. These scarce resources include
a. land.
b. people.
c. machines.
d. All of the above are correct.
ANSWER: d
DIFFICULTY: Moderate
LEARNING OBJE ECON.MANK.012 - Apply basic, economic principles of individual decision making that
CTIVES: determine how an economy generally works.
TOPICS: Economic thinking
Scarcity
KEYWORDS: BLOOM'S: Comprehension
CUSTOM ID: 008.01.0 - MC - MANK08

9. The phenomenon of scarcity stems from the fact that
a. most economies’ production methods are not very good.
b. in most economies, wealthy people consume disproportionate quantities of goods and services.
c. governments restrict production of too many goods and services.
d. resources are limited.
ANSWER: d
DIFFICULTY: Moderate
LEARNING OBJE ECON.MANK.012 - Apply basic, economic principles of individual decision making that
CTIVES: determine how an economy generally works.
TOPICS: Economic thinking
Scarcity
KEYWORDS: BLOOM'S: Comprehension
CUSTOM ID: 009.01.0 - MC - MANK08

10. Approximately what percentage of the world's economies experience scarcity?
a. 10%
b. 40%
c. 85%
d. 100%
ANSWER: d
DIFFICULTY: Easy
LEARNING OBJE ECON.MANK.012 - Apply basic, economic principles of individual decision making that
CTIVES: determine how an economy generally works.
TOPICS: Economic thinking
Scarcity
KEYWORDS: BLOOM'S: Comprehension
CUSTOM ID: 010.01.0 - MC - MANK08

11. When a society cannot produce all the goods and services people wish to have, the economy is experiencing
a. scarcity.
Copyright Cengage Learning. Powered by Cognero. Page 3