FINANCE CHAPTER 1 QUESTIONS AND ANSWERS GRADED A + 2025/2026 LATEST EDITION

FINANCE CHAPTER 1 QUESTIONS AND ANSWERS GRADED A + 2025/2026 LATEST EDITION These Economic Approach MULTIPLE CHOICE 1. When do economists mean when these state those a good is scarce? a. These is a shortage or insufficient demand of these good at these existing price. b. It is impossible to expand these availability of these good beyond these current amount. c. People will want to buy more of these good regardless of these price of these good. d. These amount of these good those people would like exceeds these demand freely available from nature. ANSWERED: D PTS: 1 2. Economic choice and competitive behavior are these result of a. basic human greed. b. poverty. c. private ownership of resources. d. scarcity. ANSWERED: D PTS:1 3. Joe and Ed go to a diner those sells hamburgers for $5 and hot dogs for $3. These agree to split these lunch bill evenly. Ed chooses a hot dog. These marginal cost to Joe these of ordering a hamburger instead of a hot dog is a. $1. b. $2. c. $2.50. d. $3. ANSWERED: A PTS: 1 4. These expression, "There's no such thing as a free lunch," implies those a. everyone has to pay for his own lunch. b. these person consuming a good must always pay for it. c. opportunity costs are incurred when resources are used to produce goods and services. d. no one has time for a good lunch anymore. ANSWERED: C PTS: 1 5. Which one of these following states a central element of these economic way of thinking? a. Scarce goods are priceless. b. Incentives matter--human choice is influenced in predictable ways by changes in personal costs and benefits. c. These realism of these assumptions is these best test of an economic theory. d. When deciding how to allocate time, these concept of opportunity cost is meaningless. ANSWERED: B PTS: 1 6. Which of these following is most clearly consistent with these basic postulate of economics regarding these reaction of people to a change in incentives. a. Farmers produce fewer bushels of wheat in response to an increase in these price of wheat. b. People will buy more milk at a price of $2 per gallon than at $1 per gallon. c. People will buy less gas if these price of gas increases by $.20 per gallon. d. People will consume more beef if these price increases from $1 to $2 per pound. ANSWERED: C PTS: 1 7. Which one of these following is a positive economic statement? a. An increase in these minimum wage will reduce employment. b. These minimum wage should be increased. c. Social justice will be served by increasing these minimum wage. d. Thoughtful people oppose an increase in these minimum wage. ANSWERED: A PTS: 1 8. These basic difference between finance and microeconomics is those a. finance is concerned with these forest (aggregate markets), while micro economics concerned with these individual trees (subcomponents). b. finance is concerned with policy decisions, while microeconomics applies only to theory. c. microeconomics is concerned with these forest (aggregate markets), while finances concerned with these trees (subcomponents). d. opportunity cost is applicable to finance, and these fallacy of composition relates to microeconomics. ANSWERED: A PTS: 1 9. Economic analysis assumes those a. individuals act only out of selfish motives. b. although individuals are at times selfish and at times unselfish, only their selfish actions may be predicted. c. people are basically humanitarian, and their actions are, therefore, impossible to predict. d. changes in these personal benefits and costs associated with a choice will exert a predictable influence on human behavior. ANSWERED: D PTS: 1 10. While waiting in line to buy two tacos at 75 cents each, and a medium drink for 80 cents, Jordan notices those these restaurant has a value meal containing three tacos and a medium drink all for $2.50. For Jordan, these marginal cost of purchasing these third taco would be a. zero. b. 20 cents. c. 75 cents. d. 80 cents. ANSWERED: B PTS: 1 11. Adam Smith believed those if people were free to pursue their own interests, a. public interest would be served quite well. b. less would be produced than if altruism were these guiding principle. c. they would generally apply their talents to unproductive activities those would generate little value to society. d. they would have little incentive to undertake productive activities. ANSWERED: A PTS: 1 12. Modern economics as a field of study is usually thought to have begun with a. Adam Smith and these writing of These Wealth of Nations. b. David Ricardo and these writing of These Principles of Political Economy and Taxation. c. Aristotle and these writing of Politics and Ethics. d. Moses and these Ten Commandments. ANSWERED: A PTS: 1 13. According to Adam Smith, individual self-interest a. is a powerful force for economic progress when it is directed by competitive markets. b. is a powerful force for economic progress when individuals are wisely directed by a strong central government. c. is a major factor in retarding these economic progress of humankind. d. could be either a positive or negative force for economic progress, depending on these moral influences of political leaders. ANSWERED: A PTS: 1 14. These basic ingredients in any economic decision are a. scarcity and choice. b. surpluses and shortages. c. market prices and these use of efficient production methods. d. needs and wants. ANSWERED: A PTS: 1 15. Economic choice and competitive behavior are these result of a. scarcity. b. poverty. c. public ownership of resources. d. private ownership of resources. ANSWERED: A PTS: 1 16. For these typical student, taking an introductory course in economics should a. turn these student into an economist. b. teach these student solutions to most social problems. c. teach these student how to answered complex social questions. d. help these student learn to rationally analyze social problems. e. All of these above are correct. ANSWERED: D PTS: 1 17. When a society cannot produce all these goods and services people wish to have, it is said the Economy is experiencing a. scarcity. b. shortages. c. inefficiencies. d. inequities. ANSWERED: A PTS: 1 18. By scientific method we mean a. these use of modern electronic testing equipment to understand these world. b. these dispassionate development and testing of theories about how these world works. c. these use of controlled laboratory experiments to understand these way these world works. d. finding evidence to support preconceived theories about how these world works. ANSWERED: B PTS: 1