Microeconomics, 8e (Pindyck/Rubinfeld)
Chapter 1 Preliminaries
1.1 The Themes of Microeconomics
1) Microeconomics is the branch of economics that deals with which of the following
topics?
A) The behavior of individual consumers
B) Unemployment and interest rates
C) The behavior of individual firms and investors
D) B and C
E) A and C
Answer: E
Diff: 1
Section: 1.1
2) A Rolling Stones song goes: "You can't always get what you want." This echoes an
important theme from microeconomics. Which of the following statements is the best
example of this theme?
A) Consumers must make the best purchasing decisions they can, given their limited
incomes.
B) Workers do not have as much leisure as they would like, given their wages and
working conditions.
C) Workers in planned economies, such as North Korea, do not have much choice over
jobs.
D) Firms in market economies have limited financial resources.
Answer: A
Diff: 1
,Section: 1.1
3) Economics is about the allocation of scarce resources. Which of the following is NOT
an example of economic scarcity?
A) If Steve goes to see a movie on Saturday, he will not be able to afford buying ice
cream.
B) If Jenny studies for her economics quiz this evening, she will not have time to walk
her dog.
C) If General Motors increases its production of SUVs this year, it will have to spend
more on advertising.
D) If Barnes and Noble bookstore increases the number of titles it carries, it will have to
reallocate shelf space to accommodate the new titles.
Answer: C
Diff: 2
Section: 1.1
4) A valid and useful theory of gold prices:
A) helps to predict the movements of gold prices over time.
B) may be founded on simplifying assumptions.
C) need not exactly predict every change in gold prices.
D) all of the above
E) none of the above
Answer: D
Diff: 1
Section: 1.1
,5) Use the following two statements to answer this question:
I. Economic theories are developed to explain observed phenomena by deducing from a
set of basic rules and assumptions.
II. Economic theories use value judgments to determine which people ought to pay more
taxes.
A) Both I and II are true.
B) I is true, and II is false.
C) I is false, and II is true.
D) Both I and II are false.
Answer: B
Diff: 1
Section: 1.1
6) Which of the following is a positive statement?
A) The President of the United States ought to be elected by a direct vote of the
American people rather than the Electoral College.
B) A fundamental assumption of the economic theory of consumer behavior is that
consumers always prefer having more of any good to having less of it.
C) Because many adults cannot afford to go to college, tax credits for tuition should be
introduced.
D) all of the above
E) none of the above
Answer: B
Diff: 1
Section: 1.1
7) Which of the following is a normative statement?
A) The taxes paid by the poor should be reduced in order to improve the income
distribution in the U.S.
B) State governments should not subsidize corporations by training welfare recipients.
, C) Presidential candidates should not be given funds from the federal government to run
campaigns.
D) The sea otter should not be allowed to spread into Southern California coastal waters,
because it will reduce the value of fisheries.
E) all of the above
Answer: E
Diff: 1
Section: 1.1
8) Which of the following is a positive statement?
A) Intermediate microeconomics should be required of all economics majors in order to
build a solid foundation in economic theory.
B) The minimum wage should not be increased because this action would increase
unemployment.
C) Smoking should be restricted on all airline flights.
D) All automobile passengers should be required to wear seatbelts in order to protect
them against injury.
E) none of the above
Answer: E
Diff: 1
Section: 1.1
Chapter 1 Preliminaries
1.1 The Themes of Microeconomics
1) Microeconomics is the branch of economics that deals with which of the following
topics?
A) The behavior of individual consumers
B) Unemployment and interest rates
C) The behavior of individual firms and investors
D) B and C
E) A and C
Answer: E
Diff: 1
Section: 1.1
2) A Rolling Stones song goes: "You can't always get what you want." This echoes an
important theme from microeconomics. Which of the following statements is the best
example of this theme?
A) Consumers must make the best purchasing decisions they can, given their limited
incomes.
B) Workers do not have as much leisure as they would like, given their wages and
working conditions.
C) Workers in planned economies, such as North Korea, do not have much choice over
jobs.
D) Firms in market economies have limited financial resources.
Answer: A
Diff: 1
,Section: 1.1
3) Economics is about the allocation of scarce resources. Which of the following is NOT
an example of economic scarcity?
A) If Steve goes to see a movie on Saturday, he will not be able to afford buying ice
cream.
B) If Jenny studies for her economics quiz this evening, she will not have time to walk
her dog.
C) If General Motors increases its production of SUVs this year, it will have to spend
more on advertising.
D) If Barnes and Noble bookstore increases the number of titles it carries, it will have to
reallocate shelf space to accommodate the new titles.
Answer: C
Diff: 2
Section: 1.1
4) A valid and useful theory of gold prices:
A) helps to predict the movements of gold prices over time.
B) may be founded on simplifying assumptions.
C) need not exactly predict every change in gold prices.
D) all of the above
E) none of the above
Answer: D
Diff: 1
Section: 1.1
,5) Use the following two statements to answer this question:
I. Economic theories are developed to explain observed phenomena by deducing from a
set of basic rules and assumptions.
II. Economic theories use value judgments to determine which people ought to pay more
taxes.
A) Both I and II are true.
B) I is true, and II is false.
C) I is false, and II is true.
D) Both I and II are false.
Answer: B
Diff: 1
Section: 1.1
6) Which of the following is a positive statement?
A) The President of the United States ought to be elected by a direct vote of the
American people rather than the Electoral College.
B) A fundamental assumption of the economic theory of consumer behavior is that
consumers always prefer having more of any good to having less of it.
C) Because many adults cannot afford to go to college, tax credits for tuition should be
introduced.
D) all of the above
E) none of the above
Answer: B
Diff: 1
Section: 1.1
7) Which of the following is a normative statement?
A) The taxes paid by the poor should be reduced in order to improve the income
distribution in the U.S.
B) State governments should not subsidize corporations by training welfare recipients.
, C) Presidential candidates should not be given funds from the federal government to run
campaigns.
D) The sea otter should not be allowed to spread into Southern California coastal waters,
because it will reduce the value of fisheries.
E) all of the above
Answer: E
Diff: 1
Section: 1.1
8) Which of the following is a positive statement?
A) Intermediate microeconomics should be required of all economics majors in order to
build a solid foundation in economic theory.
B) The minimum wage should not be increased because this action would increase
unemployment.
C) Smoking should be restricted on all airline flights.
D) All automobile passengers should be required to wear seatbelts in order to protect
them against injury.
E) none of the above
Answer: E
Diff: 1
Section: 1.1
