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TEST BANK
TU
Economics
TO
Seventh Edition
R
R. Glenn Hubbard, Anthony Patrick O’Brien
G
U
♦️♦️♦️INSTANT DOWNLOAD
R
♦️♦️♦️COMPLETE CHAPTERS
U
♦️♦️♦️COMPLETE ANSWERS
JHGFDS
, QWERTYUI
Economics 2019 (Hubbard/O'Brien)
Chapter 1 E c o n o m i c s : Foundations and Models
1.1 Three Key Economic Ideas
1) Ford assembles some cars in Mexico because the lower wages the company pays to Mexican workers
and the lower prices it pays for auto parts in Mexico reduces Ford's costs. This is an example of Ford
reacting to which of the three key economic ideas?
A) People are rational.
B) People respond to economic incentives.
TU
C) Optimal decisions are made at the margin.
D) Firms attempt to maximize revenues.
Answer: B
Diff: 2 Page Ref: 2
Topic: Scarcity
Learning Outcome: Micro-1: Identify the basic principles of economics and explain how to think like an economist
AACSB: Analytical thinking
TO
Special Feature: Chapter Opener: Why Does Ford Assemble Cars in Both the United States and Mexico?
2) In economics, choices must be made because we live in a world of
A) unemployment.
B) scarcity.
C) greed.
D) unlimited resources.
R
Answer: B
Diff: 1 Page Ref: 4
Topic: Scarcity
*: Recurring
G
Learning Outcome: Micro-1: Identify the basic principles of economics and explain how to think like an economist
AACSB: Analytical thinking
3) Which of the following statements about scarcity is true?
A) Scarcity refers to the situation in which unlimited wants exceed limited resources.
U
B) Scarcity is not a problem for the wealthy.
C) Scarcity is only a problem when a country has too large a population.
D) Scarcity only arises when there is a wide disparity in income distribution.
R
Answer: A
Diff: 1 Page Ref: 4
Topic: Scarcity
*: Recurring
Learning Outcome: Micro-1: Identify the basic principles of economics and explain how to think like an economist
U
AACSB: Analytical thinking
JHGFDS
, QWERTYUI
4) The basic economic problem of has always existed and will continue to exist.
A) scarcity
B) efficiency
C) inflation
D) recession
Answer: A
Diff: 1 Page Ref: 4
Topic: Scarcity
*: Recurring
Learning Outcome: Micro-1: Identify the basic principles of economics and explain how to think like an economist
TU
AACSB: Analytical thinking
5) By definition, economics is the study of
A) how to make money in the stock market.
B) how to make money in a market economy.
C) the choices people make to attain their goals, given their scarce resources.
D) supply and demand.
TO
Answer: C
Diff: 1 Page Ref: 4
Topic: Scarcity
*: Recurring
Learning Outcome: Micro-1: Identify the basic principles of economics and explain how to think like an economist
AACSB: Analytical thinking
6) An economic is a simplified version of some aspect of economic life used to analyze an
R
economic issue.
A) market
B) trade-off
C) variable
G
D) model
Answer: D
Diff: 1 Page Ref: 4
Topic: Economic Models
U
*: Recurring
Learning Outcome: Micro-1: Identify the basic principles of economics and explain how to think like an economist
AACSB: Analytical thinking
R
7) Where do economic agents such as individuals, firms, and nations interact with each other?
A) in public locations monitored by the government
B) in any arena that brings together buyers and sellers
C) in any physical location where people can physically get together for selling goods, such as shopping
U
malls
D) in any location where transactions can be monitored by consumer groups and taxed by the
government
Answer: B
Diff: 1 Page Ref: 4
Topic: Markets
*: Recurring
Learning Outcome: Micro-1: Identify the basic principles of economics and explain how to think like an economist
AACSB: Analytical thinking
JHGFDS
, QWERTYUI
8) In economics, the term refers to a group of buyers and sellers of a product and the
arrangement by which they come together to trade.
A) collective
B) cooperative
C) market
D) trade-off
Answer: C
Diff: 1 Page Ref: 4
Topic: Markets
*: Recurring
TU
Learning Outcome: Micro-1: Identify the basic principles of economics and explain how to think like an economist
AACSB: Analytical thinking
9) Economists assume that individuals
A) behave in unpredictable ways.
B) will never take actions to help others.
C) prefer to live in a society that values fairness above all else.
TO
D) are rational and respond to incentives.
Answer: D
Diff: 1 Page Ref: 5
Topic: People Are Rational
*: Recurring
Learning Outcome: Micro-1: Identify the basic principles of economics and explain how to think like an economist
AACSB: Analytical thinking
R
10) Economists assume that rational behavior is useful in explaining choices people make
A) because irrational people do not make economic choices.
B) even though people may not behave rationally all the time.
C) because individuals act rationally all the time in all circumstances.
G
D) even though people rarely, if ever, behave in a rational manner.
Answer: B
Diff: 2 Page Ref: 5
Topic: People Are Rational
U
*: Recurring
Learning Outcome: Micro-1: Identify the basic principles of economics and explain how to think like an economist
AACSB: Analytical thinking
R
11) Economists assume that rational people do all of the following except
A) use all available information as they act to achieve their goals.
B) undertake activities that benefit others and hurt themselves.
C) weigh the benefits and costs of all possible alternative actions.
U
D) respond to economic incentives.
Answer: B
Diff: 2 Page Ref: 5
Topic: People Are Rational
*: Recurring
Learning Outcome: Micro-1: Identify the basic principles of economics and explain how to think like an economist
AACSB: Analytical thinking
JHGFDS
TEST BANK
TU
Economics
TO
Seventh Edition
R
R. Glenn Hubbard, Anthony Patrick O’Brien
G
U
♦️♦️♦️INSTANT DOWNLOAD
R
♦️♦️♦️COMPLETE CHAPTERS
U
♦️♦️♦️COMPLETE ANSWERS
JHGFDS
, QWERTYUI
Economics 2019 (Hubbard/O'Brien)
Chapter 1 E c o n o m i c s : Foundations and Models
1.1 Three Key Economic Ideas
1) Ford assembles some cars in Mexico because the lower wages the company pays to Mexican workers
and the lower prices it pays for auto parts in Mexico reduces Ford's costs. This is an example of Ford
reacting to which of the three key economic ideas?
A) People are rational.
B) People respond to economic incentives.
TU
C) Optimal decisions are made at the margin.
D) Firms attempt to maximize revenues.
Answer: B
Diff: 2 Page Ref: 2
Topic: Scarcity
Learning Outcome: Micro-1: Identify the basic principles of economics and explain how to think like an economist
AACSB: Analytical thinking
TO
Special Feature: Chapter Opener: Why Does Ford Assemble Cars in Both the United States and Mexico?
2) In economics, choices must be made because we live in a world of
A) unemployment.
B) scarcity.
C) greed.
D) unlimited resources.
R
Answer: B
Diff: 1 Page Ref: 4
Topic: Scarcity
*: Recurring
G
Learning Outcome: Micro-1: Identify the basic principles of economics and explain how to think like an economist
AACSB: Analytical thinking
3) Which of the following statements about scarcity is true?
A) Scarcity refers to the situation in which unlimited wants exceed limited resources.
U
B) Scarcity is not a problem for the wealthy.
C) Scarcity is only a problem when a country has too large a population.
D) Scarcity only arises when there is a wide disparity in income distribution.
R
Answer: A
Diff: 1 Page Ref: 4
Topic: Scarcity
*: Recurring
Learning Outcome: Micro-1: Identify the basic principles of economics and explain how to think like an economist
U
AACSB: Analytical thinking
JHGFDS
, QWERTYUI
4) The basic economic problem of has always existed and will continue to exist.
A) scarcity
B) efficiency
C) inflation
D) recession
Answer: A
Diff: 1 Page Ref: 4
Topic: Scarcity
*: Recurring
Learning Outcome: Micro-1: Identify the basic principles of economics and explain how to think like an economist
TU
AACSB: Analytical thinking
5) By definition, economics is the study of
A) how to make money in the stock market.
B) how to make money in a market economy.
C) the choices people make to attain their goals, given their scarce resources.
D) supply and demand.
TO
Answer: C
Diff: 1 Page Ref: 4
Topic: Scarcity
*: Recurring
Learning Outcome: Micro-1: Identify the basic principles of economics and explain how to think like an economist
AACSB: Analytical thinking
6) An economic is a simplified version of some aspect of economic life used to analyze an
R
economic issue.
A) market
B) trade-off
C) variable
G
D) model
Answer: D
Diff: 1 Page Ref: 4
Topic: Economic Models
U
*: Recurring
Learning Outcome: Micro-1: Identify the basic principles of economics and explain how to think like an economist
AACSB: Analytical thinking
R
7) Where do economic agents such as individuals, firms, and nations interact with each other?
A) in public locations monitored by the government
B) in any arena that brings together buyers and sellers
C) in any physical location where people can physically get together for selling goods, such as shopping
U
malls
D) in any location where transactions can be monitored by consumer groups and taxed by the
government
Answer: B
Diff: 1 Page Ref: 4
Topic: Markets
*: Recurring
Learning Outcome: Micro-1: Identify the basic principles of economics and explain how to think like an economist
AACSB: Analytical thinking
JHGFDS
, QWERTYUI
8) In economics, the term refers to a group of buyers and sellers of a product and the
arrangement by which they come together to trade.
A) collective
B) cooperative
C) market
D) trade-off
Answer: C
Diff: 1 Page Ref: 4
Topic: Markets
*: Recurring
TU
Learning Outcome: Micro-1: Identify the basic principles of economics and explain how to think like an economist
AACSB: Analytical thinking
9) Economists assume that individuals
A) behave in unpredictable ways.
B) will never take actions to help others.
C) prefer to live in a society that values fairness above all else.
TO
D) are rational and respond to incentives.
Answer: D
Diff: 1 Page Ref: 5
Topic: People Are Rational
*: Recurring
Learning Outcome: Micro-1: Identify the basic principles of economics and explain how to think like an economist
AACSB: Analytical thinking
R
10) Economists assume that rational behavior is useful in explaining choices people make
A) because irrational people do not make economic choices.
B) even though people may not behave rationally all the time.
C) because individuals act rationally all the time in all circumstances.
G
D) even though people rarely, if ever, behave in a rational manner.
Answer: B
Diff: 2 Page Ref: 5
Topic: People Are Rational
U
*: Recurring
Learning Outcome: Micro-1: Identify the basic principles of economics and explain how to think like an economist
AACSB: Analytical thinking
R
11) Economists assume that rational people do all of the following except
A) use all available information as they act to achieve their goals.
B) undertake activities that benefit others and hurt themselves.
C) weigh the benefits and costs of all possible alternative actions.
U
D) respond to economic incentives.
Answer: B
Diff: 2 Page Ref: 5
Topic: People Are Rational
*: Recurring
Learning Outcome: Micro-1: Identify the basic principles of economics and explain how to think like an economist
AACSB: Analytical thinking
JHGFDS
