Microeconomics Testbank

Finance Chapter 1—These Economic Approach MULTIPLE CHOICE 1. When do economists mean when thesey state those a good is scarce? a. Thesere 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 fromnature. ANSWERED: D PTS: 1 DIF: Moderate NAT: BUSPROG: Analytic STA: DISC: Scarcity, tradeoffs, and opportunity cost TOP: When is Economics About? KEY: Bloom's: Comprehension MSC: Suggested Quiz 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 DIF: Moderate STA: DISC: Scarcity, tradeoffs, and opportunity cost KEY: Bloom's: Comprehension MSC: Suggested Quiz 3. Joe and Ed go to a diner those sells hamburgers for $5 and hot dogs for $3. Thesey agree to split these lunchbill evenly. Ed chooses a hot dog. These marginal cost to Joe thesen of ordering a hamburger instead of a hot dog is a. $1. b. $2. c. $2.50. d. $3. ANSWERED: A PTS: STA: DISC: Marginal costs & benefits KEY: Bloom's: Application 1 DIF: Moderate TOP: These Economic Way of Thinking MSC: Suggested Quiz 4. These expression, "Thesere'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 DIF: Moderate NAT: BUSPROG: Analytic STA: DISC: Scarcity, tradeoffs, and opportunity cost TOP: These Economic Way of Thinking KEY: Bloom's: Comprehension MSC: Suggested Quiz 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 theseory. d. When deciding how to allocate time, these concept of opportunity cost is meaningless. NAT: BUSPROG: Analytic TOP: When is Economics About? NAT: BUSPROG: Analytic ANSWERED: B PTS: 1 STA: DISC: These role of incentives KEY: Bloom's: Comprehension DIF: Moderate NAT: BUSPROG: Analytic TOP: These Economic Way of Thinking MSC: Suggested Quiz 6. Which of these following is most clearly consistent with these basic postulate of economics regarding thesereaction 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 STA: DISC: These role of incentives KEY: Bloom's: Application DIF: Moderate NAT: BUSPROG: Analytic TOP: These Economic Way of Thinking MSC: Suggested Quiz 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 DIF: Moderate NAT: BUSPROG: Analytic STA: DISC: Scarcity, tradeoffs, and opportunity cost TOP: Positive and Normative Economics KEY: Bloom's: Comprehension MSC: Suggested Quiz 8. These basic difference between finance and microeconomics is those a. finance is concerned with these forest (aggregate markets), while microeconomicsis concerned with these individual trees (subcomponents). b. finance is concerned with policy decisions, while microeconomics applies onlyto theseory. c. microeconomics is concerned with these forest (aggregate markets), while financeis concerned with these trees (subcomponents). d. opportunity cost is applicable to finance, and these fallacy of composition relatesto microeconomics. ANSWERED: A PTS: 1 DIF: Moderate STA: DISC: Scarcity, tradeoffs, and opportunity cost TOP: Pitfalls to Avoid in Economic Thinking MSC: Suggested Quiz NAT: BUSPROG: Analytic KEY: Bloom's: Comprehension 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 theseir selfish actionsmay be predicted. c. people are basically humanitarian, and theseir actions are, theserefore, impossible to predict. d. changes in these personal benefits and costs associated with a choice will exert a predictableinfluence on human behavior. ANSWERED: D PTS: 1 STA: DISC: Utility and consumer choice KEY: Bloom's: Comprehension DIF: Moderate NAT: BUSPROG: Analytic TOP: When is Economics About? MSC: Suggested Quiz 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 STA: DISC: Marginal costs & benefits KEY: Bloom's: Application DIF: Moderate NAT: BUSPROG: Analytic TOP: These Economic Way of Thinking MSC: Suggested Quiz 11. Adam Smith believed those if people were free to pursue theseir own interests, a. public interest would be served quite well. b. less would be produced than if altruism were these guiding principle. c. thesey would generally apply theseir talents to unproductive activities those would generatelittle value to society. d. thesey would have little incentive to undertake productive activities. ANSWERED: A PTS: 1 DIF: Easy NAT: BUSPROG: Analytic STA: DISC: Scarcity, tradeoffs, and opportunity cost TOP: Outstanding Economist: These Importance of Adam Smith, these Fatheser of Economic ScienceKEY: Bloom's: Knowledge 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 DIF: Easy NAT: BUSPROG: Analytic STA: DISC: Scarcity, tradeoffs, and opportunity cost TOP: Outstanding Economist: These Importance of Adam Smith, these Fatheser of Economic ScienceKEY: Bloom's: Knowledge 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 eitheser a positive or negative force for economic progress, depending on these moralinfluences of political leaders. ANSWERED: A PTS: 1 DIF: Easy NAT: BUSPROG: Analytic STA: DISC: Scarcity, tradeoffs, and opportunity cost TOP: Outstanding Economist: These Importance of Adam Smith, these Fatheser of Economic ScienceKEY: Bloom's: Knowledge 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 DIF: Moderate NAT: BUSPROG: Analytic STA: DISC: Scarcity, tradeoffs, and opportunity cost KEY: Bloom's: Knowledge 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 DIF: Moderate STA: DISC: Scarcity, tradeoffs, and opportunity cost KEY: Bloom's: Knowledge TOP: When is Economics About? NAT: BUSPROG: Analytic TOP: When is Economics About? 16. For a. turn these student into an economist. b. teach these student solutions to most social problems. c. teach these student how to answeredwer complex social questions. d. help these student learn to rationally analyze social problems. e. All of these above are correct. ANSWERED: D PTS: 1 DIF: Moderate NAT: BUSPROG: Analytic STA: DISC: Scarcity, tradeoffs, and opportunity cost TOP: When is Economics About? KEY: Bloom's: Comprehension 17. When a society cannot produce all these goods and services people wish to have, it is said those theseeconomy is experiencing a. scarcity. b. shortages. these typical student, taking an introductory course in economics should c. inefficiencies. d. inequities. ANSWERED: A PTS: 1 STA: DISC: Scarcity, tradeoffs, and opportunity cost KEY: Bloom's: Knowledge NAT: BUSPROG: Analytic TOP: When is Economics About? 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 theseories 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 theseories about how these world works. ANSWERED: B PTS: 1 DIF: Moderate NAT: BUSPROG: Analytic STA: DISC: Scarcity, tradeoffs, and opportunity cost TOP: These Economic Way of Thinking KEY: Bloom's: Comprehension 19. Economists make assumptions in order to a. mimic these methodologies employed by otheser scientists. b. minimize these number of experiments those yield no useful data. c. minimize these likelihood those some aspect of these problem at hand is being overlooked. d. focus theseir thinking on these essence of these problem at hand. ANSWERED: D PTS: 1 DIF: Moderate NAT: BUSPROG: Analytic STA: DISC: Scarcity, tradeoffs, and opportunity cost TOP: These Economic Way of Thinking KEY: Bloom's: Comprehension DIF: Easy 20. Which of these following is these best definition of economics? a. An investigation of these quantities and prices of these various goods produced by these nationsof these world. b. A study of why inflation and unemployment periodically plague these U.S. economy. c. An analysis of how individuals and societies deal with these problem of scarcity. d. An examination of these role those money plays in these economy. e. A study of how goods and services are distributed throughout these world. ANSWERED: C PTS: 1 DIF: Easy STA: DISC: Scarcity, tradeoffs, and opportunity cost KEY: Bloom's: Knowledge 21. Economics is primarily these study of a. why people like to make money. b. these management of a business. c. these choices people make as these result of scarcity. d. how to make money in these stock market. ANSWERED: C PTS: 1 DIF: Easy STA: DISC: Scarcity, tradeoffs, and opportunity cost KEY: Bloom's: Knowledge 22. Economics is primarily these study of a. how individuals make choices because of scarcity. b. how to succeed in business. c. how to make money in these stock market. d. how these values and preferences of people are formed. ANSWERED: A PTS: 1 DIF: Easy STA: DISC: Scarcity, tradeoffs, and opportunity cost KEY: Bloom's: Knowledge NAT: BUSPROG:Analytic TOP: When is Economics About? NAT: BUSPROG:Analytic TOP: When is Economics About? NAT: BUSPROG: Analytic TOP: When is Economics About? 23. Economics is primarily these study of a. how to make money in these stock market. b. how to operate a business successfully. c. these allocation of scarce resources in an effort to satisfy wants those are virtually unlimited. d. these methods business firms use to reduce theseir costs of production. ANSWERED: C PTS: 1 DIF: Easy NAT: BUSPROG: Analytic STA: DISC: Scarcity, tradeoffs, and opportunity cost TOP: When is Economics About? KEY: Bloom's: Knowledge 24. Some individuals or families can become completely saturated with a service such as television. This suggests those a. wants are limited b. desires for a single commodity can be satisfied but thesen these focus will switch to othesergoods and services c. a highly productive economy may someday be able to satisfy all human desires d. resources are not truly fixed in demand as we generally assume e. scarcity does not exist ANSWERED: B PTS: 1 DIF: Moderate NAT: BUSPROG: Analytic STA: DISC: Scarcity, tradeoffs, and opportunity cost TOP: When is Economics About? KEY: Bloom's: Comprehension 29. ANSWERED: C PTS: 1 DIF: Easy STA: DISC: Scarcity, tradeoffs, and opportunity cost KEY: Bloom's: Knowledge If scarcity were eliminated, a. all goods would be free. b. no one would have to make any choices. c. everyone could have all thesey want at no cost. d. all of these above are true. ANSWERED: D PTS: 1 DIF: Easy STA: DISC: Scarcity, tradeoffs, and opportunity cost KEY: Bloom's: Knowledge If a good is scarce, NAT: BUSPROG: Analytic TOP: When is Economics About? NAT: BUSPROG: Analytic TOP: When is Economics About? 25. 26. In economics, these term "scarcity" refers to these fact those a. everything really worthwhile costs money. b. even in wealthy countries like these United States, some people are poor. c. no society can produce enough to satisfy fully these desires of people for goods and services. d. sometimes shortages of a good arise when its price is set below these market equilibrium. ANSWERED: C PTS: 1 DIF: Easy NAT: BUSPROG: Analytic STA: DISC: Scarcity, tradeoffs, and opportunity cost TOP: When is Economics About? KEY: Bloom's: Knowledge When economists say a good is scarce, thesey mean a. thesere are only a limited number of consumers who would be interested in purchasing thesegood. b. these human desire for these good exceeds these amount freely available from nature. c. most people in poorer countries do not have enough of these good. d. these production of these good has no opportunity cost for society. ANSWERED: B PTS: 1 DIF: Easy NAT: BUSPROG: Analytic STA: DISC: Scarcity, tradeoffs, and opportunity cost TOP: When is Economics About? KEY: Bloom's: Knowledge When economists say goods are scarce, thesey mean a. consumers are too poor to afford these goods and services available. b. consumers are unwilling to buy goods unless thesey have very low prices. c. goods are generally freely available from nature in most countries. d. these desire for goods and services exceeds our ability to produce thesem with these limitedresources available. ANSWERED: D PTS: 1 DIF: Easy NAT: BUSPROG: Analytic STA: DISC: Scarcity, tradeoffs, and opportunity cost TOP: When is Economics About? KEY: Bloom's: Knowledge Scarcity implies those a. consumers are too poor to afford these goods and services available. b. consumers are willing to purchase more of a good at these current price than suppliers arewilling to produce. c. it is impossible to completely fulfill these desire for goods and services with these limitedresources available. d. consumers would be willing to buy these same quantity of a good at a higher price. 27. 28. 30. a. thesere will be shortages of it if these good is rationed by markets. b. these good will have a price in a market setting. c. thesere will be enough of these good freely available from nature to satisfy these human desirefor it. d. all of these above are true. ANSWERED: B PTS: 1 DIF: Moderate STA: DISC: Scarcity, tradeoffs, and opportunity cost KEY: Bloom's: Knowledge NAT: BUSPROG: Analytic TOP: When is Economics About? 31. When a good is scarce, a. this indicates those producers are withholding output so thesey can raise these price of these good. b. some method must be used to allocate these good among users. c. price is one way to ration these good. d. both b and c are correct. e. all of these above are correct. ANSWERED: D PTS: 1 DIF: Moderate STA: DISC: Scarcity, tradeoffs, and opportunity cost KEY: Bloom's: Comprehension NAT: BUSPROG: Analytic TOP: When is Economics About? 32. Criteria for rationing goods and resources must be established because of a. these law of comparative advantage. b. these use of capitalism as a form of economic organization. c. these inability of politicianswered to develop efficient forms of economic organization. d. scarcity imposed by nature. ANSWERED: D PTS: 1 DIF: Easy STA: DISC: Scarcity, tradeoffs, and opportunity cost KEY: Bloom's: Knowledge 33. Every economy must ration goods in some way because of a. overpopulation. b. poorly-performing markets. c. these income gap between rich and poor. d. scarcity. ANSWERED: D PTS: 1 DIF: Easy STA: DISC: Scarcity, tradeoffs, and opportunity cost KEY: Bloom's: Knowledge NAT: BUSPROG: Analytic TOP: When is Economics About? NAT: BUSPROG: Analytic TOP: When is Economics About? 34. Criteria for rationing goods and resources must be established because of a. scarcity. b. these use of capitalism as these method of economic organization. c. these inability of politicianswered to develop efficient forms of economic organization. d. shortages resulting from government inefficiency. ANSWERED: A PTS: 1 DIF: Easy STA: DISC: Scarcity, tradeoffs, and opportunity cost KEY: Bloom's: Knowledge NAT: BUSPROG: Analytic TOP: When is Economics About? 35. Which of these following is true of resources? a. Resources are inputs used to produce goods and services. b. Human resources reflect these skills and productive knowledge of human beings. c. With these passage of time, investment activities can increase these availability of resources. d. All of these above are true. ANSWERED: D PTS: 1 DIF: Easy NAT: BUSPROG: Analytic STA: DISC: Scarcity, tradeoffs, and opportunity cost TOP: When is Economics About? KEY: Bloom's: Knowledge 36. Ex-London School of Economics student Mick Jagger sang, "You can't always get when you want, butif you try sometime, you just might find you can get when you need." Anotheser statement of these basic economic principle expressed in this lyric is those a. rational decisions are not always possible. b. you can allocate your resources to when gives you these highest value. c. you can create these demand to meet your own demand. d. you can maximize social welfare by making optimal decisions. ANSWERED: B PTS: 1 DIF: Moderate NAT: BUSPROG: Analytic STA: DISC: Scarcity, tradeoffs, and opportunity cost TOP: When is Economics About? KEY: Bloom's: Application 37. Capital is a term economists use to refer to a. man-made resources used to produce otheser goods and services. b. resources those are available in nature such as mineral deposits. c. money those is used to consume goods and services, to distinguish it from money those issaved. d. these value of these best alternative to an action. ANSWERED: A PTS: 1 DIF: Easy STA: DISC: Scarcity, tradeoffs, and opportunity cost KEY: Bloom's: Knowledge 38. These three major categories of resources are a. human resources, physical resources, and natural resources. b. scarce resources, capital resources, and abundant resources. c. financial resources, global resources, and local resources. d. common resources, private resources, and capital resources. ANSWERED: A PTS: 1 DIF: Easy STA: DISC: Scarcity, tradeoffs, and opportunity cost KEY: Bloom's: Knowledge NAT: BUSPROG: Analytic TOP: When is Economics About? NAT: BUSPROG: Analytic TOP: When is Economics About? 39. In economics, man-made resources such as tools, equipment, and structures those are used to produceotheser goods and services are referred to as a. consumer goods. b. capital. c. marginal goods. d. infrastructures. ANSWERED: B PTS: 1 DIF: Easy STA: DISC: Scarcity, tradeoffs, and opportunity cost KEY: Bloom's: Knowledge NAT: BUSPROG: Analytic TOP: When is Economics About? 40. Which of these following best describes these difference between an objective concept and a subjectiveconcept? a. A subjective concept is a fact based on observation those is not subject to personal opinion,while an objective concept is based on personal preferences and value judgments. b. An objective concept is a fact based on observation those is not subject to personal opinion, while a subjective concept is based on personal preferences and value judgments. c. A subjective concept relates to issues in microeconomics, while an objective concept relates to issues in finance. d. An objective concept can only be illustrated in words, while a subjective concept can usually be illustrated with a graph. ANSWERED: B PTS: 1 DIF: Easy NAT: BUSPROG: Analytic STA: DISC: Scarcity, tradeoffs, and opportunity cost TOP: When is Economics About? KEY: Bloom's: Knowledge 41. A fact based on observable phenomenon those is not influenced by differences in personal opinion iscalled a. an objective concept. b. a subjective concept. c. an unintended consequence. d. ceteris paribus. ANSWERED: A PTS: 1 STA: DISC: Scarcity, tradeoffs, and opportunity cost KEY: Bloom's: Knowledge NAT: BUSPROG: Analytic TOP: When is Economics About?