TEST BANK For Microeconomics, 9th edition by Jeffrey M. Perloff, Chapters 1 - 20 /// // Introduction // Supply and Demand

TEST BANK For Microeconomics, 9th edition by Jeffrey M. Perloff, Chapters 1 - 20 /// // Introduction // Supply and Demand 3. Applying the Supply-and-Demand Model 4. Consumer Choice 5. Applying Consumer Theory 6. Firms and Production 7. Costs 8. Competitive Firms and Markets 9. Applying the Competitive Model 10. 11. 12. 13. 14. 15. 16. 17. 18. 19. 20. General Equilibrium and Economic Welfare Monopoly Pricing and Advertising Oligopoly and Monopolistic Competition Game Theory Factor Markets Interest Rates, Investments, and Capital Markets Uncertainty Externalities, Open-Access, and Public Goods Asymmetric Information Contracts and Moral Hazards Chapter 1 1.1 Introduction Microeconomics: The Allocation of Scarce Resources 1) Microeconomics studies the allocation of A) decision makers. B) scarce resources. C) models. D) unlimited resources. ANSWER: B Section: The Allocation of Scarce Resources Question Status: Old AACSB: Analytic thinking 2) Microeconomics is often called A) price theory. B) decision science. C) scarcity. D) resource theory. ANSWER: A Section: The Allocation of Scarce Resources Question Status: Old AACSB: Analytic thinking 3) Most microeconomic models assume that decision makers wish to A) make themselves as well off as possible. B) act selfishly. C) make others as well off as possible. D) None of the above. ANSWER: A Section: The Allocation of Scarce Resources Question Status: Old AACSB: Analytic thinking 4) Society faces trade-‑offs because of A) government regulations. B) profit motive. C) faceless bureaucrats. D) scarcity. ANSWER: D Section: The Allocation of Scarce Resources Question Status: Old AACSB: Analytic thinking 5) A market A) always involves the personal exchange of goods for money. B) allows interactions between consumers and firms. C) always takes place at a physical location. D) has no influence on prices. ANSWER: B Section: The Allocation of Scarce Resources Question Status: Old AACSB: Analytic thinking 6) What links the decisions of consumers and firms in a market? A) the government B) prices C) coordination officials D) microeconomics ANSWER: B Section: The Allocation of Scarce Resources Question Status: Old AACSB: Analytic thinking 7) The price of a good is A) always equal to the cost of producing the good. B) never affected by the number of buyers and sellers. C) usually determined in a market. D) None of the above. ANSWER: C Section: The Allocation of Scarce Resources Question Status: Old AACSB: Analytic thinking 8) Who or what is responsible for bringing together scarce resources to produce most of the goods and services in the U.S.? A) the U.S. government B) the United Nations C) the Federal Reserve Bank D) markets and prices ANSWER: D Section: The Allocation of Scarce Resources Revised Question Status: AACSB: Analytic thinking 9) Which of the following is a fundamental topic addressed by microeconomics? A) whether to extend unemployment insurance B) determining how many new iPhones the Apple company should produce C) the level of inflation in the country D) the impact of interest rates on savings in the economy ANSWER: B Section: The Allocation of Scarce Resources Question Status: Revised AACSB: Analytic thinking 10) A "ʺtwinkie tax"ʺ on fatty foods would aim to A) reduce the consumption of fatty foods. B) reduce the production of fatty foods. C) raise tax revenues for other uses. D) All of the above. ANSWER: D Section: The Allocation of Scarce Resources Question Status: Old AACSB: Analytic thinking 11) Which choice below illustrates the tradeoff faced by surfboard manufacturers after Clark foam shut down in 2005, eliminating 80% of the world'ʹs foam blanks used to shape surfboards? The firms decide to A) substitute foam blanks for balsa wood blanks as used in the 1940s. B) advertise their new surfboard wax. C) offer surf classes. D) B and C ANSWER: A Section: The Allocation of Scarce Resources Question Status: AACSB: New Application of knowledge 12) In the Soviet Union, which boasted about giving every worker a job, some workers were given the task of digging holes and filling them again. What function of microeconomic analysis did this policy address? A) What goods/services to produce B) How to produce the goods and services C) Who gets the goods and services D) A and B ANSWER: D Section: The Allocation of Scarce Resources Question Status: New AACSB: Analytic thinking 13) The objective of creating a permit trading system for SO2 (sulfur dioxide) is to A) employ environmental protection agency (EPA) workers. B) create a market in which one did not previously exist. C) make annual company tax reporting more difficult. D) increase the incidence of acid rain. ANSWER: B Section: The Allocation of Scarce Resources Question Status: New AACSB: Application of knowledge For the following, please answer "ʺTrue"ʺ or "ʺFalse"ʺ and explain why. 14) Under most circumstances, the application of taxes on goods will only affect who gets the goods. ANSWER: False. Taxes will affect which goods are produced, how goods are produced, and who gets the goods. Section: The Allocation of Scarce Resources Question Status: Old AACSB: Analytic thinking 15) Most modern financial centers use computers to match buyers and sellers. This absence of personal contact contradicts the definition of a market. ANSWER: False. Buyers and sellers need not meet during a market transaction since a market is not tied to a particular location. Section: The Allocation of Scarce Resources Question Status: Old AACSB: Analytic thinking 16) Governments do not respond to prices. ANSWER: False. When products or services that governments purchase become more expensive, governments tend to purchase less of the products. For example, when the price of gasoline increased dramatically in the spring of 2006, the state of Georgia restricted the use of school buses. Section: The Allocation of Scarce Resources Question Status: Old AACSB: Analytic thinking 17) Explain how a market helps determine which goods and services will be produced, how to produce them, and who gets them. ANSWER: A market promotes interaction between consumers and firms. This interaction will result in prices, which influence the decisions of consumers and firms. Section: The Allocation of Scarce Resources Question Status: Old AACSB: Analytic thinking