TEST BANK
TEST BANK
Page 1
,1. Which topic is studied in macroeconomics?
A) the change in automobile sales due to a change in the price of automobiles
B) the effect of a tax reduction on the profits of an individual business
C) recessions
D) the unemployment of workers displaced by technological change in the typesetting
industry
2. The basic concern of microeconomics is to:
A) keep business firms from losing money.
B) prove that capitalism is better than socialism.
C) study the choices people make.
D) use unlimited resources to produce goods and services to satisfy limited wants.
3. How people choose among the alternatives available to them is:
A) not part of the study of economics.
B) impossible to describe.
C) the study of microeconomics.
D) not important in the study of microeconomics.
4. Scarcity in economics means that:
A) we often do not have sufficient resources to achieve our objectives.
B) the wants of people are limited.
C) there must be poor people in rich countries.
D) shortages exist in nearly all markets.
5. If resources are scarce, it means that they:
A) are insufficient to provide enough goods and services to satisfy all human material
wants and needs.
B) have no opportunity cost.
C) are probably not valued by consumers.
D) have an unlimited supply.
6. A central and fundamental theme in economics is that:
A) wants are limited.
B) the United States is a rich country, but we are simply not aware of it.
C) people have unlimited wants but limited means to satisfy them.
D) resources are unlimited.
Page 2
, 7. The problem of scarcity is confronted by:
A) industrialized societies only.
B) preindustrial societies only.
C) societies governed by communist philosophies only.
D) all societies.
8. When we are forced to make choices, we are facing the concept of:
A) human capital.
B) inflation.
C) scarcity.
D) market failure.
9. We are forced to make choices because of:
A) exploitation.
B) efficiency.
C) scarcity.
D) the margin.
10. Scarcity exists when:
A) making choices among two or more alternatives is not necessary.
B) individuals can have more of any good without giving up anything.
C) individuals can have more of one good but only by giving up something else.
D) resources are unlimited.
11. Although freshwater is very abundant in most places, it is scarce because:
A) it has no alternative uses.
B) there is not enough of it to meet all needs.
C) it is a free good.
D) scarce goods in general are not all that costly.
12. Freshwater is considered a scarce good because:
A) not enough of it is available for all needs.
B) it does not have any uses.
C) scarce goods are not expensive.
D) not enough of it is available for all needs and because it is not expensive.
Page 3
, 13. The problem of determining what goods and services society should produce:
A) exists because we can produce more than we need or want.
B) exists because there are not enough resources to provide all of the goods and
services that people want.
C) would not exist if all goods and services were scarce.
D) would not exist if government owned all of the resources.
14. Which resource is NOT one that pertains to the production of rice?
A) fertile land
B) labor
C) capital equipment
D) money
15. A resource is anything that:
A) can be used in production.
B) you pay for.
C) is in scarce supply.
D) can be consumed.
16. We have to make choices because:
A) we have unlimited income.
B) resources are scarce.
C) resources are infinite.
D) with good planning, trade-offs can be avoided.
17. When a chef prepares a dinner for a customer, which factor is physical capital?
A) the chef
B) the oven
C) the food ingredients
D) the chef's training and experience
18. Manny is attending college and majoring in economics. By doing so, Manny is
improving his:
A) land.
B) labor.
C) capital.
D) human capital.
Page 4
TEST BANK
Page 1
,1. Which topic is studied in macroeconomics?
A) the change in automobile sales due to a change in the price of automobiles
B) the effect of a tax reduction on the profits of an individual business
C) recessions
D) the unemployment of workers displaced by technological change in the typesetting
industry
2. The basic concern of microeconomics is to:
A) keep business firms from losing money.
B) prove that capitalism is better than socialism.
C) study the choices people make.
D) use unlimited resources to produce goods and services to satisfy limited wants.
3. How people choose among the alternatives available to them is:
A) not part of the study of economics.
B) impossible to describe.
C) the study of microeconomics.
D) not important in the study of microeconomics.
4. Scarcity in economics means that:
A) we often do not have sufficient resources to achieve our objectives.
B) the wants of people are limited.
C) there must be poor people in rich countries.
D) shortages exist in nearly all markets.
5. If resources are scarce, it means that they:
A) are insufficient to provide enough goods and services to satisfy all human material
wants and needs.
B) have no opportunity cost.
C) are probably not valued by consumers.
D) have an unlimited supply.
6. A central and fundamental theme in economics is that:
A) wants are limited.
B) the United States is a rich country, but we are simply not aware of it.
C) people have unlimited wants but limited means to satisfy them.
D) resources are unlimited.
Page 2
, 7. The problem of scarcity is confronted by:
A) industrialized societies only.
B) preindustrial societies only.
C) societies governed by communist philosophies only.
D) all societies.
8. When we are forced to make choices, we are facing the concept of:
A) human capital.
B) inflation.
C) scarcity.
D) market failure.
9. We are forced to make choices because of:
A) exploitation.
B) efficiency.
C) scarcity.
D) the margin.
10. Scarcity exists when:
A) making choices among two or more alternatives is not necessary.
B) individuals can have more of any good without giving up anything.
C) individuals can have more of one good but only by giving up something else.
D) resources are unlimited.
11. Although freshwater is very abundant in most places, it is scarce because:
A) it has no alternative uses.
B) there is not enough of it to meet all needs.
C) it is a free good.
D) scarce goods in general are not all that costly.
12. Freshwater is considered a scarce good because:
A) not enough of it is available for all needs.
B) it does not have any uses.
C) scarce goods are not expensive.
D) not enough of it is available for all needs and because it is not expensive.
Page 3
, 13. The problem of determining what goods and services society should produce:
A) exists because we can produce more than we need or want.
B) exists because there are not enough resources to provide all of the goods and
services that people want.
C) would not exist if all goods and services were scarce.
D) would not exist if government owned all of the resources.
14. Which resource is NOT one that pertains to the production of rice?
A) fertile land
B) labor
C) capital equipment
D) money
15. A resource is anything that:
A) can be used in production.
B) you pay for.
C) is in scarce supply.
D) can be consumed.
16. We have to make choices because:
A) we have unlimited income.
B) resources are scarce.
C) resources are infinite.
D) with good planning, trade-offs can be avoided.
17. When a chef prepares a dinner for a customer, which factor is physical capital?
A) the chef
B) the oven
C) the food ingredients
D) the chef's training and experience
18. Manny is attending college and majoring in economics. By doing so, Manny is
improving his:
A) land.
B) labor.
C) capital.
D) human capital.
Page 4
