TEST BANK Essentials of Economics by N. Gregory MankiwAll Chapters 1 - 24 9th edition

Table of Contents. Part I: INTRODUCTION. 1. Ten Principles of Economics. 2. Thinking Like an Economist. 3. Interdependence and the Gains from Trade. Part II: HOW MARKETS WORK. 4. The Market Forces of Supply and Demand. 5. Elasticity and Its Application. 6. Supply, Demand, and Government Policies. Part III: MARKETS AND WELFARE. 7. Consumers, Producers, and the Efficiency of Markets. 8. Application: The Costs of Taxation. 9. Application: International Trade. Part IV: THE ECONOMICS OF THE PUBLIC SECTOR. 10. Externalities. 11. Public Goods and Common Resources. Part V: Firm Behavior and the Organization of Industry. Page 3 12. The Costs of Production. 13. Firms in Competitive Markets. 14. Monopoly. Part VI: THE DATA OF MACROECONOMICS. 15. Measuring a Nation’s Income. 16. Measuring the Cost of Living. Part VII: THE REAL ECONOMY IN THE LONG RUN. 17. Production and Growth. 18. Saving, Investment, and the Financial System. 19. The Basic Tools of Finance. 20. Unemployment and Its Natural Rate. Part VIII: MONEY AND PRICES IN THE LONG RUN. 21. The Monetary System. 22. Money Growth and Inflation. Part IX: SHORT-RUN ECONOMIC FLUCTUATIONS. 23. Aggregate Demand and Aggregate Supply. 24. The Influence of Monetary and Fiscal Policy on Aggregate Demand. Page 4 1. Ten Principles of Economics. 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 OBJECTIVES: ECON.MANK.012 - Apply basic, economic principles of individual decision making that 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 OBJECTIVES: ECON.MANK.012 - Apply basic, economic principles of individual decision making that 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 OBJECTIVES: ECON.MANK.012 - Apply basic, economic principles of individual decision making that determine how an economy generally works. TOPICS: Economic thinking Scarcity KEYWORDS: BLOOM'S: Comprehension Page 5 CUSTOM ID: 003.01.0 - MC - MANK08 4. In considering how to allocate its scarce resources among its various members, a household considers Page 6 a. each member’s abilities. b. each member’s efforts. c. each member’s desires. d. All of the above are correct. ANSWER: d DIFFICULTY: Easy LEARNING OBJECTIVES: ECON.MANK.012 - Apply basic, economic principles of individual decision making that 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 OBJECTIVES: ECON.MANK.012 - Apply basic, economic principles of individual decision making that 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 Page 7 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 OBJECTIVES: ECON.MANK.012 - Apply basic, economic principles of individual decision making that determine how an economy generally works. TOPICS: Economic thinking Scarcity 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 OBJECTIVES: ECON.MANK.012 - Apply basic, economic principles of individual decision making that 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