Complete Test Bank for Principles of MICROeconomics, 9th Edition by Mankiw Questions & Answers with rationales (Chapter 1-22) | LATEST

,Contents
Chapter bU1 The bUScope bUand bUMethod bUof bUEconomics 1
Chapter bU2 The bUEconomic bUProblem: bUScarcity bUand bUChoice 29
Chapter bU3 Demand, bUSupply, bUand bUMarket bUEquilibrium 55
Chapter bU4 Demand bUand bUSupply bUApplications 98
Chapter bU5 Elasticity 117
Chapter bU6 Household bUBehavior bUand bUConsumer bUChoice 135
Chapter bU7 The bUProduction bUProcess: bUThe bUBehavior bUof bUProfit-Maximizing 171
bUFirms


Chapter bU8 Short-Run bUCosts bUand bUOutput bUDecisions 207
Chapter bU9 Long-Run bUCosts bUand bUOutput bUDecisions 252
Chapter bU10 Input bUDemand: bUThe bULabor bUand bULand bUMarkets 292
Chapter bU11 Input bUDemand: bUThe bUCapital bUMarkets bUand bUInvestment bUDecision 323
Chapter bU12 General bUEquilibrium bUand bUthe bUEfficiency bUof bUPerfect bUCompetition 348
Chapter bU13 Monopoly bUand bUAntitrust bUPolicy 377
Chapter bU14 Oligopoly 425
Chapter bU15 Monopolistic bUCompetition 449
Chapter bU16 Externalities, bUPublic bUGoods, bUImperfect
bUInformation,bUand bUSocial bUChoice 476
Chapter bU17 Uncertainty bUand bUAsymmetric bUInformation 517
Chapter bU18 Income bUDistribution bUand bUPoverty 535
Chapter bU19 Public bUFinance: bUThe bUEconomics bUof bUTaxation 563
Chapter bU20 International bUTrade, bUComparative bUAdvantage, bUand bUProtectionism 592
Chapter bU21 Economic bUGrowth bUin bUDeveloping bUand bUTransitional bUEconomies 628

,Chapter 1 The Scope and Method of Economics
bU bU bU bU bU bU




1.1 Why bUStudy bUEconomics?
1 Multiple b U Choice

1) The b U reasons b U to b U study b U economics b U include b U which b U of b U the b U following?
A) to bUbe bUan bUinformed bUvoter B) b U to b U understand b U society b U and b U global
b U affairs

C) bU to bUlearn bUa bUway bUof bUthinking D) bUall bUof bUthe
abovebUAnswer:
bU bU D
Diff: bU1
Topic: b U Why bUStudy
bUEconomics?bUSkill: b U Fact



2) Marginalism b U is
A) the b U best b U alternative b U that b U we b U forego b U when b U making b U a b U decision.
B) the bUstudy bUof bUhow bUsocieties bUchoose bUto bUuse bUscarce bUresources.
C) a b U market b U situation b U in b U which b U profit b U opportunities b U are b U eliminated b U almost
b U instantaneously.

D) the b U process b U of b U analyzing b U the b U additional b U costs b U or b U benefits b U arising
bU from b U a b U decision.bUAnswer: bU D
Diff: bU1
Topic: b U Why bUStudy
bUEconomics?bUSkill:

b U Definition



3) Economics bUis bUbest bUdefined bUas bUthe bUstudy bUof
A) financial b U decision-making.
B) how b U consumers b U make b U purchasing b U decisions.
C) choices b U made b U by b U people b U faced b U with b U scarcity.
D) inflation, b U unemployment, b U and b U economic
bU growth.bUAnswer: bU C
Diff: bU2
Topic: b U Why bUStudy
bUEconomics?bUSkill:

b U Definition



4) The bUIndustrial bURevolution bUrefers bUto bUthe bUrise bUof bUthe bUmodern bUfactory bUsystem bUin
duringbUthe bUlate bUeighteenth bUand bUearly bUnineteenth bUcenturies.
A) the bUUnited bUStates B) bUEngland
C) b U France D) bUGermany
Answer: b U B
Diff: bU1
Topic: b U Why bUStudy
bUEconomics?bUSkill: b U Fact




1

, 5) Which b U of b U the b U following b U statements b U is b U correct?
A) Economics b U is b U a b U natural b U science.
B) In b U large b U measure, b U economics b U is b U the b U study b U of b U how b U people b U make b U choices.
C) If b U poverty b U was b U eliminated b U there b U would b U be b U no b U reason b U to b U study b U economics.
D) Economic b U analysis b U can b U be b U used b U to b U explain b U how b U societies, b U but b U not
b U individuals, b U makebUdecisions.


Answer: b U B
Diff: bU1
Topic: b U Why bUStudy
bUEconomics?bUSkill: b U Fact



6) Economics bUis bUthe bUstudy bUof
A) how bUto bUinvest bUin bUthe bUstock bUmarket.
B) how b U society b U uses b U limited b U resources.
C) the bUrole bUof bUmoney bUin bUmarkets.
D) how b U government b U officials b U decide b U which b U goods b U and b U services
bU are b U produced.bUAnswer: b U B
Diff: bU2
Topic: b U Why bUStudy
bUEconomics?bUSkill:

b U Definition



7) Costs b U that b U cannot b U be b U avoided, b U because b U they b U have b U already b U been b U incurred b U are
b U known b U as

A) differential bUcosts. B) bUmarginal bUcosts.
C) bU opportunity bUcosts. D) bUsunk
bU costs.bUAnswer: bU D
Diff: bU2
Topic: b U Why bUStudy
bUEconomics?bUSkill:

b U Definition



8) Suppose bUthat bUtwo bUweeks bUago bUyou bUpurchased bUa bUticket bUto bUthe bUsymphony bUfor
bU $40. bU Last bU week bU someone bUinvited bU you bU to bU go bU camping bU on bU the bU same bU night bU as

bU the bU symphony bU concert. bU You bU wouldbUmuch bU rather bU go bU camping bU than bU go bU to bU the

bU symphony. bU You bU have bU tried bU unsuccessfully bU to bU sell bU the bU symphony b U concert b U ticket.

b U Which b U of b U the b U following b U statements b U regarding b U this b U situation b U is b U correct?

A) The b U $40 b U symphony b U ticket b U should b U be b U irrelevant b U in b U your b U decision
b U making, b U because b U itbUrepresents bUthe bU marginal bUcost bUof bUgoing bUcamping.

B) The b U $40 b U you b U paid b U for b U the b U symphony b U ticket b U should b U be b U irrelevant b U in
b U your b U decision b U making,bUbecause bUit bUis bUa bUsunk bU cost.

C) The bU$40 bUyou bUpaid bUfor bUthe bUsymphony bUticket bUis bUrelevant bUto bUthe bUdecision, bUas
bUthis bUrepresentsbUthe bUopportunity bUcost bUof bUgoing bUcamping.

D) You b U should b U base b U your b U decision b U on b U whether b U or b U not b U going b U camping b U will
b U provide b U you b U withbUmore bUthan bU$40 bUin bUsatisfaction.


Answer: b U B
Diff: bU2
Topic: b U Why bUStudy
bUEconomics?bUSkill:

b U Conceptual

AACSB: b U Reflective bUThinking



2