Test Bank for ECON MICRO (5th Edition, by William A. McEachern) Chapter 1 - 21

,Name Clas Dat
5
: 5 s: 5 e:

Chapter501:5The5Art5and5Science5of5Economic5Analysis
True5/5False

1. Economics5is5best5defined5as5the5study5of5how5individuals5decide5to5use5limited5resources5in5an5attempt5to5satisfy5
unlimited5wants.
a. True
b. False
ANSWER: True

2. Economics5studies5how5decision5makers5use5scarce5resources5to5satisfy5unlimited5wants.
a. True
b. False
ANSWER: True

3. In5economics,5money5is5an5example5of5capital.
a. True
b. False
ANSWER: False

4. Profit5is5the5payment5received5by5resource5owners5for5the5use5of5their5capital.
a. True
b. False
ANSWER: False

5. Rent5is5the5payment5received5by5resource5owners5for5the5use5of5their5natural5resources.
a. True
b. False
ANSWER: True

6. An5economist5would5classify51005shares5of5the5Apple5Computers5stock5as5capital.
a. True
b. False
ANSWER: False

7. Profit5is5the5payment5made5for5land5resources.
a. True
b. False
ANSWER: False

8. Resources5are5used5only5in5the5production5of5goods,5not5services.
a. True
b. False
ANSWER: False

9. Considering5both5product5markets5and5resource5markets,5most5economic5decision5makers5participate5in5the5economy5as5
both5buyers5and5sellers.
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,Name Clas Dat
5
: 5 s: 5 e:

Chapter501:5The5Art5and5Science5of5Economic5Analysis

a. True
b. False
ANSWER: True

10. Labor5and5capital5are5exchanged5in5the5resource5market.
a. True
b. False
ANSWER: True

11. A5rational5individual5gives5more5to5charity5when5such5contributions5receive5favorable5tax5treatment.
a. True
b. False
ANSWER: True

12. A5rational5individual5would5make5charitable5contributions5only5if5such5contributions5receive5favorable5tax5treatment.
a. True
b. False
ANSWER: False

13. The5assumption5of5rational5self-interest5does5not5rule5out5the5possibility5of5concern5for5other5individuals.
a. True
b. False
ANSWER: True

14. It5is5always5rational5to5acquire5more5information5before5making5a5decision.
a. True
b. False
ANSWER: False

15. Rational5self-interest5is5equivalent5to5pure5selfishness.
a. True
b. False
ANSWER: False

16. Sara5is5considering5the5purchase5of5a5new5car.5Rational5self-
interest5demands5that5she5do5an5exhaustive5research5study5to5acquire5every5bit5of5information5possible5about5her5potential5o
ptions.
a. True
b. False
ANSWER: False

17. A5marginal5adjustment5only5refers5to5a5minor5change.
a. True
b. False
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, Name Clas Dat
5
: 5 s: 5 e:

Chapter501:5The5Art5and5Science5of5Economic5Analysis
ANSWER: False




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