Econ Final Complete Test bank GRADE A

Chapter 1 Preliminaries 1) Microeconomics is the branch of economics that deals with which of the following topics? A) The behavior of individual consumers C) The behavior of individual firms and investors E) A and C 2) A Rolling Stones song goes: ʺYou canʹt always get what you want.ʺ 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. 3) Economics is about the allocation of scarce resources. Which of the following is NOT an example of economic scarcity? C) If General Motors increases its production of SUVs this year, it will have to spend more on advertising. 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 Answer: D 5) Use the following two statements to answer this question: I. Economic theories are developed to explain observed phenomena by deducing