Finance nChapter n1—These nEconomic nApproach
MULTIPLEnCHOICE
1. When ndo n economistsn mean n when n thesey n staten thosen an good n isn scarce?
a. Thesere nisn an shortage n orn insufficientn demand n of n thesen good n atn thesen existingn price.
b. Itn isn impossible n to n expand n thesenavailability n of n thesen good n beyond n thesen currentn amount.
c. People nwilln wantn to n buy n more n of n thesen good n regardlessn of n thesen pricen of n thesen good.
d. Thesen amountnofnthesengood nthosenpeoplenwouldnlikenexceedsnthesendemandnfreely n
available n fromnature.
ANSWERED:n D PTS:n n 1 DIF: Moderate NAT:n BUSPROG:nAnalytic
STA:n DISC:n Scarcity,n tradeoffs, n and n opportunity n cost
TOP:nWhen nisnEconomicsnAbout?nKEY:n Bloom's:n Com
prehension MSC:n Suggested n Quiz
2. Economic n choicenand n competitive n behaviorn aren thesen resultn of
a. basicn human n greed.
b. poverty.
c. private nownership nof n resources.
d. scarcity.
ANSWERED:n D PTS:n n 1 DIF: Moderate NAT:n BUSPROG:nAnalytic
STA:n DISC:n Scarcity,n tradeoffs, n and n opportunity n cost
TOP:nWhen nisnEconomicsnAbout?nKEY:n Bloom's:n Com
prehension MSC:n Suggested n Quiz
3. Joen and nEdngo ntonandinernthosensellsnhamburgersnforn$5nandnhotndogsnforn$3.nTheseynagreentonsplitnthesen l
unchbillnevenly.n Ednchoosesnan hotn dog.nThesenmarginaln costn tonJoenthesennofn orderingn an hamburgern inst
ead n of n an hotn dogn is
a. $1.
b. $2.
c. $2.50.
d. $3.
ANSWERED:n A PTS:n n 1 DIF: Moderate NAT:n BUSPROG:nAnalytic
STA:n DISC:n Marginaln costsn &n benefits
TOP:n Thesen EconomicnWaynofnThinkingn
KEY:n Bloom's:n Application MSC:n Suggested n Quiz
4. Thesen expression,n"Thesere'sn no nsuch n thingnasn an freen lunch,"n impliesn those
a. everyone n hasn to n pay n forn hisn own n lunch.
b. thesen person n consumingn an good n mustn alwaysn pay n forn it.
c. opportunity ncostsn aren incurred n when nresourcesn aren used nto n produce n goodsn and n services.
d. no n onen hasn timen forn an good n lunch n anymore.
ANSWERED:n C PTS:n n 1 DIF: Moderate NAT:n BUSPROG:nAnalytic
STA:n DISC:n Scarcity,n tradeoffs,n and n opportunity n cost
TOP:n Thesen Economic n Way n of n Thinking
KEY:nBloom's:nComprehension
n MSC:n Suggested n Quiz
5. Which nonen of n thesen followingn statesn an centraln elementn of n thesen economic n way n of n thinking?
a. Scarcen goodsn aren priceless.
b. Incentivesn matter--
human nchoicenisninfluencednin npredictablenwaysnbynchangesninnpersonaln costsn and nbenefits.
c. Thesen realismnof n thesen assumptionsn isn thesen bestn testn of n an n economic n theseory.
d. When ndecidingn hown to n allocate ntime,n thesenconceptn of n opportunity n costn isn meaningless.
, ANSWERED:n B PTS:n n 1 DIF: Moderate NAT:n BUSPROG:nAnalytic
STA:n DISC:n These n rolen of n incentives
TOP:n Thesen EconomicnWaynofnThinkingn
KEY:n Bloom's:n Comprehension MSC:n Suggested n Quiz
6. Which n ofnthesenfollowingnisnmostnclearlynconsistentnwithnthesenbasicnpostulatenofneconomicsn
regardingn thesereaction n of n people n to n an changen in n incentives.
a. Farmersn produce n fewern bushelsn of n wheatn in n response n to n an n increasen in n thesen pricen of n wheat.
b. People nwilln buy n moren milk n atn an pricen of n $2 n pern gallon n than n atn $1 n pern gallon.
c. People n willn buy nlessn gasn if n thesen pricen of n gasn increasesn by n $.20 n pern gallon.
d. People n willn consume n moren beef n if n thesen pricen increasesn fromn$1 n to n $2 n pern pound.
ANSWERED:n C PTS:n n 1 DIF: Moderate NAT:n BUSPROG:nAnalytic
STA:n DISC:n These n rolen of n incentives
TOP:n Thesen EconomicnWaynofnThinkingn
KEY:n Bloom's:n Application MSC:n Suggested n Quiz
7. Which nonen of n thesen followingn isn an positive n economic n statement?
a. An n increase n in nthesen minimum n wagen willn reduce n employment.
b. Thesen minimum nwagen should n ben increased.
c. Socialn justicen willn ben served nby nincreasingnthesen minimum n wage.
d. Thoughtfuln peoplen oppose nan nincrease n in n thesen minimum nwage.
ANSWERED:n A PTS:n n 1 DIF: Moderate NAT:n BUSPROG:nAnalytic
STA:n DISC:n Scarcity,n tradeoffs,n and n opportunity n cost
TOP:n Positiven and n Normative n Economics
KEY:nBloom's:nComprehension
n MSC:n Suggested n Quiz
8. Thesenbasicndifference n between nfinance nand nmicroeconomicsn isn those
a. financenisnconcerned nwith nthesenforestn(aggregatenmarkets),nwhilenmicroeconomicsisn
concerned n with n thesen individualn treesn (subcomponents).
b. financenisnconcerned nwith npolicyndecisions,n whilenmicroeconomicsnappliesnonlyto n
theseory.
c. microeconomicsnisnconcernednwith nthesenforestn(aggregatenmarkets),nwhilenfinanceisn
concerned n with n thesen treesn (subcomponents).
d. opportunityncostnisnapplicablentonfinance,nandnthesenfallacynofncomposition nrelateston
microeconomics.
ANSWERED:n A PTS:n n 1 DIF: Moderate NAT:n BUSPROG:nAnalytic
STA:n DISC:n Scarcity,n tradeoffs,n and n opportunity n cost
TOP:n Pitfallsn to n Avoid n in n Economic n Thinking
KEY:nBloom's:nComprehension
n MSC:n Suggested n Quiz
9. Economic n analysisn assumesn those
a. individualsn actn only n outn of n selfish n motives.
b. although nindividualsnarenatntimesnselfish nand natntimesnunselfish,nonly ntheseirnselfishn
actionsmay n ben predicted.
c. people naren basically nhumanitarian, n and ntheseirnactionsn are,n theserefore, nimpossible nto npredict.
d. changesnin nthesen personalnbenefitsnandncostsnassociated nwith nanchoicenwillnexertnan
predictableinfluence n on n human n behavior.
ANSWERED:n D PTS:n n 1 DIF: Moderate NAT:n BUSPROG:nAnalytic
STA:n DISC:n Utility n and n consumern choice
TOP:nWhen nisnEconomicsnAbout?nKEY:n Bloom's:n Com
prehension MSC:n Suggested n Quiz
,10. Whilen waitingninn linentonbuyntwon tacosnatn75ncentsn each,nand nanmediumndrinknforn80n cents,n Jordan n
noticesn thosenthesenrestaurantnhasnanvaluenmealncontainingn threentacosnand nanmediumndrink n alln for
$2.50.
FornJordan,n thesen marginaln costn of n purchasingn thesen third n taco n would n be
a. zero.
b. 20 n cents.
c. 75 n cents.
d. 80 n cents.
ANSWERED:n B PTS:n n 1 DIF: Moderate NAT:n BUSPROG:nAnalytic
STA:n DISC:n Marginaln costsn &n benefits
TOP:n Thesen EconomicnWaynofnThinkingn
KEY:n Bloom's:n Application MSC:n Suggested n Quiz
11. AdamnSmith nbelieved n thosen if n people n werenfreen to n pursue n theseirn own n interests,
a. publicn interestn would n benserved n quitenwell.
b. lessn would n ben produced n than n if n altruismnweren thesen guidingnprinciple.
c. thesey nwould ngenerallynapply ntheseirntalentsntonunproductiven activitiesnthosenwouldn
generatelittle n valuen to n society.
d. thesey nwould n havenlittlenincentive n to n undertake n productive n activities.
ANSWERED:n A PTS:n n 1 DIF: Easy NAT:n BUSPROG:nAnalytic
STA:n DISC:nScarcity,ntradeoffs,nand nopportunity ncost
TOP:n OutstandingnEconomist:nThesenImportance nofnAdamnSmith,nthesenFathesernofnEconomic n
ScienceKEY:n Bloom's:n Knowledge
12. Modern neconomicsn asn an field n of n study n isn usually n thoughtn to n haven begun n with
a. AdamnSmith n and nthesen writingn of n Thesen Wealth n ofn Nations.
b. David nRicardo n and n thesen writingnof n Thesen Principlesn ofn Politicaln Economy n and n Taxation.
c. Aristotlen and nthesen writingnof n Politicsn and n Ethics.
d. Mosesn and nthesenTen nCommandments.
ANSWERED:n A PTS:n n 1 DIF: Easy NAT:n BUSPROG:nAnalytic
STA:n DISC:nScarcity,ntradeoffs,nand nopportunity ncost
TOP:n OutstandingnEconomist:nThesenImportance nofnAdamnSmith,nthesenFathesernofnEconomic n
ScienceKEY:n Bloom's:n Knowledge
13. Accordingnto nAdamnSmith,nindividualn self-interest
a. isn an powerfuln forcen forn economic n progressn when n itn isn directed n by ncompetitive n markets.
b. isn an powerfulnforcenforn economicnprogressnwhennindividualsnarenwiselyndirected nbynanstrongn
centraln government.
c. isn an majorn factorn in n retardingn thesen economic n progressn of n humankind.
d. could nbeneithesernanpositivenornnegativenforcenforneconomicnprogress,ndependingnonnthesen
moralinfluencesn of n politicaln leaders.
ANSWERED:n A PTS:n n 1 DIF: Easy NAT:n BUSPROG:nAnalytic
STA:n DISC:nScarcity,ntradeoffs,nand nopportunity ncost
TOP:n OutstandingnEconomist:nThesenImportance nofnAdamnSmith,nthesenFathesernofnEconomic n
ScienceKEY:n Bloom's:n Knowledge
14. Thesen basicningredientsn in n any neconomic n decision n are
a. scarcity n and n choice.
b. surplusesn and n shortages.
c. marketn pricesn and n thesen usenof n efficientn production n methods.
d. needsn and n wants.
ANSWERED:n A PTS:n n 1 DIF: Moderate NAT:n BUSPROG:nAnalytic
, STA:n DISC:n Scarcity,n tradeoffs, n and n opportunity n cost
TOP:nWhen nisnEconomicsnAbout?n
KEY:n Bloom's:n Knowledge
15. Economic n choicenand n competitive n behaviorn aren thesen resultn of
a. scarcity.
b. poverty.
c. publicn ownership n of n resources.
d. private nownership nof n resources.
ANSWERED:n A PTS:n n 1 DIF: Moderate NAT:n BUSPROG:nAnalytic
STA:n DISC:n Scarcity,n tradeoffs, n and n opportunity n cost
TOP:nWhen nisnEconomicsnAbout?n
KEY:n Bloom's:n Knowledge
16. Forn thesen typicaln student,n takingnan n introductory n course n in neconomicsn should
a. turn nthesen studentn into n an n economist.
b. teach n thesen studentn solutionsn to nmostn socialn problems.
c. teach nthesen studentn hown to nansweredwern complex n socialn questions.
d. help nthesen studentn learn n to nrationally nanalyze n socialn problems.
e. Alln of n thesen aboven aren correct.
ANSWERED:n D PTS:n n 1 DIF: Moderate NAT:n BUSPROG:nAnalytic
STA:n DISC:n Scarcity,n tradeoffs, n and n opportunity n cost
TOP:nWhen nisnEconomicsnAbout?n
KEY:n Bloom's:n Comprehension
17. When n ansocietyncannotnproducenallnthesengoodsnand nservicesnpeoplenwishnto nhave,nitnisnsaid nthosent
heseeconomy n isn experiencing
a. scarcity.
b. shortages.
c. inefficiencies.
d. inequities.
ANSWERED:n A PTS:n n 1 DIF: Easy NAT:n BUSPROG:nAnalytic
STA:n DISC:n Scarcity,n tradeoffs, n and n opportunity n cost
TOP:nWhen nisnEconomicsnAbout?n
KEY:n Bloom's:n Knowledge
18. By nscientific n method n wen mean
a. thesenusen of n modern n electronic ntestingnequipmentn to nunderstand n thesen world.
b. thesendispassionate ndevelopmentn and n testingnof n theseoriesn aboutn hownthesen world n works.
c. thesenusen of n controlled n laboratory nexperimentsn to n understand nthesen way nthesen world nworks.
d. findingnevidence n to nsupportn preconceived n theseoriesn aboutn hownthesen world n works.
ANSWERED:n B PTS:n n 1 DIF: Moderate NAT:n BUSPROG:nAnalytic
STA:n DISC:n Scarcity,n tradeoffs,n and n opportunity n cost
TOP:n Thesen Economic nWay nof nThinking KEY:n Bloom's:n Comprehension
19. Economistsn maken assumptionsn in n ordern to
a. mimicn thesen methodologiesnemployed n by nothesern scientists.
b. minimize nthesen numbern of n experimentsn thosen yield n no n usefuln data.
c. minimize nthesen likelihood n thosen some n aspectn of n thesen problem n atn hand nisn beingn overlooked.
d. focusn theseirn thinkingn on nthesen essence n of n thesen problem n atn hand.
ANSWERED:n D PTS:n n 1 DIF: Moderate NAT:n BUSPROG:nAnalytic
STA:n DISC:n Scarcity,n tradeoffs,n and n opportunity n cost
TOP:n Thesen Economic nWay nof nThinking KEY:n Bloom's:n Comprehension
MULTIPLEnCHOICE
1. When ndo n economistsn mean n when n thesey n staten thosen an good n isn scarce?
a. Thesere nisn an shortage n orn insufficientn demand n of n thesen good n atn thesen existingn price.
b. Itn isn impossible n to n expand n thesenavailability n of n thesen good n beyond n thesen currentn amount.
c. People nwilln wantn to n buy n more n of n thesen good n regardlessn of n thesen pricen of n thesen good.
d. Thesen amountnofnthesengood nthosenpeoplenwouldnlikenexceedsnthesendemandnfreely n
available n fromnature.
ANSWERED:n D PTS:n n 1 DIF: Moderate NAT:n BUSPROG:nAnalytic
STA:n DISC:n Scarcity,n tradeoffs, n and n opportunity n cost
TOP:nWhen nisnEconomicsnAbout?nKEY:n Bloom's:n Com
prehension MSC:n Suggested n Quiz
2. Economic n choicenand n competitive n behaviorn aren thesen resultn of
a. basicn human n greed.
b. poverty.
c. private nownership nof n resources.
d. scarcity.
ANSWERED:n D PTS:n n 1 DIF: Moderate NAT:n BUSPROG:nAnalytic
STA:n DISC:n Scarcity,n tradeoffs, n and n opportunity n cost
TOP:nWhen nisnEconomicsnAbout?nKEY:n Bloom's:n Com
prehension MSC:n Suggested n Quiz
3. Joen and nEdngo ntonandinernthosensellsnhamburgersnforn$5nandnhotndogsnforn$3.nTheseynagreentonsplitnthesen l
unchbillnevenly.n Ednchoosesnan hotn dog.nThesenmarginaln costn tonJoenthesennofn orderingn an hamburgern inst
ead n of n an hotn dogn is
a. $1.
b. $2.
c. $2.50.
d. $3.
ANSWERED:n A PTS:n n 1 DIF: Moderate NAT:n BUSPROG:nAnalytic
STA:n DISC:n Marginaln costsn &n benefits
TOP:n Thesen EconomicnWaynofnThinkingn
KEY:n Bloom's:n Application MSC:n Suggested n Quiz
4. Thesen expression,n"Thesere'sn no nsuch n thingnasn an freen lunch,"n impliesn those
a. everyone n hasn to n pay n forn hisn own n lunch.
b. thesen person n consumingn an good n mustn alwaysn pay n forn it.
c. opportunity ncostsn aren incurred n when nresourcesn aren used nto n produce n goodsn and n services.
d. no n onen hasn timen forn an good n lunch n anymore.
ANSWERED:n C PTS:n n 1 DIF: Moderate NAT:n BUSPROG:nAnalytic
STA:n DISC:n Scarcity,n tradeoffs,n and n opportunity n cost
TOP:n Thesen Economic n Way n of n Thinking
KEY:nBloom's:nComprehension
n MSC:n Suggested n Quiz
5. Which nonen of n thesen followingn statesn an centraln elementn of n thesen economic n way n of n thinking?
a. Scarcen goodsn aren priceless.
b. Incentivesn matter--
human nchoicenisninfluencednin npredictablenwaysnbynchangesninnpersonaln costsn and nbenefits.
c. Thesen realismnof n thesen assumptionsn isn thesen bestn testn of n an n economic n theseory.
d. When ndecidingn hown to n allocate ntime,n thesenconceptn of n opportunity n costn isn meaningless.
, ANSWERED:n B PTS:n n 1 DIF: Moderate NAT:n BUSPROG:nAnalytic
STA:n DISC:n These n rolen of n incentives
TOP:n Thesen EconomicnWaynofnThinkingn
KEY:n Bloom's:n Comprehension MSC:n Suggested n Quiz
6. Which n ofnthesenfollowingnisnmostnclearlynconsistentnwithnthesenbasicnpostulatenofneconomicsn
regardingn thesereaction n of n people n to n an changen in n incentives.
a. Farmersn produce n fewern bushelsn of n wheatn in n response n to n an n increasen in n thesen pricen of n wheat.
b. People nwilln buy n moren milk n atn an pricen of n $2 n pern gallon n than n atn $1 n pern gallon.
c. People n willn buy nlessn gasn if n thesen pricen of n gasn increasesn by n $.20 n pern gallon.
d. People n willn consume n moren beef n if n thesen pricen increasesn fromn$1 n to n $2 n pern pound.
ANSWERED:n C PTS:n n 1 DIF: Moderate NAT:n BUSPROG:nAnalytic
STA:n DISC:n These n rolen of n incentives
TOP:n Thesen EconomicnWaynofnThinkingn
KEY:n Bloom's:n Application MSC:n Suggested n Quiz
7. Which nonen of n thesen followingn isn an positive n economic n statement?
a. An n increase n in nthesen minimum n wagen willn reduce n employment.
b. Thesen minimum nwagen should n ben increased.
c. Socialn justicen willn ben served nby nincreasingnthesen minimum n wage.
d. Thoughtfuln peoplen oppose nan nincrease n in n thesen minimum nwage.
ANSWERED:n A PTS:n n 1 DIF: Moderate NAT:n BUSPROG:nAnalytic
STA:n DISC:n Scarcity,n tradeoffs,n and n opportunity n cost
TOP:n Positiven and n Normative n Economics
KEY:nBloom's:nComprehension
n MSC:n Suggested n Quiz
8. Thesenbasicndifference n between nfinance nand nmicroeconomicsn isn those
a. financenisnconcerned nwith nthesenforestn(aggregatenmarkets),nwhilenmicroeconomicsisn
concerned n with n thesen individualn treesn (subcomponents).
b. financenisnconcerned nwith npolicyndecisions,n whilenmicroeconomicsnappliesnonlyto n
theseory.
c. microeconomicsnisnconcernednwith nthesenforestn(aggregatenmarkets),nwhilenfinanceisn
concerned n with n thesen treesn (subcomponents).
d. opportunityncostnisnapplicablentonfinance,nandnthesenfallacynofncomposition nrelateston
microeconomics.
ANSWERED:n A PTS:n n 1 DIF: Moderate NAT:n BUSPROG:nAnalytic
STA:n DISC:n Scarcity,n tradeoffs,n and n opportunity n cost
TOP:n Pitfallsn to n Avoid n in n Economic n Thinking
KEY:nBloom's:nComprehension
n MSC:n Suggested n Quiz
9. Economic n analysisn assumesn those
a. individualsn actn only n outn of n selfish n motives.
b. although nindividualsnarenatntimesnselfish nand natntimesnunselfish,nonly ntheseirnselfishn
actionsmay n ben predicted.
c. people naren basically nhumanitarian, n and ntheseirnactionsn are,n theserefore, nimpossible nto npredict.
d. changesnin nthesen personalnbenefitsnandncostsnassociated nwith nanchoicenwillnexertnan
predictableinfluence n on n human n behavior.
ANSWERED:n D PTS:n n 1 DIF: Moderate NAT:n BUSPROG:nAnalytic
STA:n DISC:n Utility n and n consumern choice
TOP:nWhen nisnEconomicsnAbout?nKEY:n Bloom's:n Com
prehension MSC:n Suggested n Quiz
,10. Whilen waitingninn linentonbuyntwon tacosnatn75ncentsn each,nand nanmediumndrinknforn80n cents,n Jordan n
noticesn thosenthesenrestaurantnhasnanvaluenmealncontainingn threentacosnand nanmediumndrink n alln for
$2.50.
FornJordan,n thesen marginaln costn of n purchasingn thesen third n taco n would n be
a. zero.
b. 20 n cents.
c. 75 n cents.
d. 80 n cents.
ANSWERED:n B PTS:n n 1 DIF: Moderate NAT:n BUSPROG:nAnalytic
STA:n DISC:n Marginaln costsn &n benefits
TOP:n Thesen EconomicnWaynofnThinkingn
KEY:n Bloom's:n Application MSC:n Suggested n Quiz
11. AdamnSmith nbelieved n thosen if n people n werenfreen to n pursue n theseirn own n interests,
a. publicn interestn would n benserved n quitenwell.
b. lessn would n ben produced n than n if n altruismnweren thesen guidingnprinciple.
c. thesey nwould ngenerallynapply ntheseirntalentsntonunproductiven activitiesnthosenwouldn
generatelittle n valuen to n society.
d. thesey nwould n havenlittlenincentive n to n undertake n productive n activities.
ANSWERED:n A PTS:n n 1 DIF: Easy NAT:n BUSPROG:nAnalytic
STA:n DISC:nScarcity,ntradeoffs,nand nopportunity ncost
TOP:n OutstandingnEconomist:nThesenImportance nofnAdamnSmith,nthesenFathesernofnEconomic n
ScienceKEY:n Bloom's:n Knowledge
12. Modern neconomicsn asn an field n of n study n isn usually n thoughtn to n haven begun n with
a. AdamnSmith n and nthesen writingn of n Thesen Wealth n ofn Nations.
b. David nRicardo n and n thesen writingnof n Thesen Principlesn ofn Politicaln Economy n and n Taxation.
c. Aristotlen and nthesen writingnof n Politicsn and n Ethics.
d. Mosesn and nthesenTen nCommandments.
ANSWERED:n A PTS:n n 1 DIF: Easy NAT:n BUSPROG:nAnalytic
STA:n DISC:nScarcity,ntradeoffs,nand nopportunity ncost
TOP:n OutstandingnEconomist:nThesenImportance nofnAdamnSmith,nthesenFathesernofnEconomic n
ScienceKEY:n Bloom's:n Knowledge
13. Accordingnto nAdamnSmith,nindividualn self-interest
a. isn an powerfuln forcen forn economic n progressn when n itn isn directed n by ncompetitive n markets.
b. isn an powerfulnforcenforn economicnprogressnwhennindividualsnarenwiselyndirected nbynanstrongn
centraln government.
c. isn an majorn factorn in n retardingn thesen economic n progressn of n humankind.
d. could nbeneithesernanpositivenornnegativenforcenforneconomicnprogress,ndependingnonnthesen
moralinfluencesn of n politicaln leaders.
ANSWERED:n A PTS:n n 1 DIF: Easy NAT:n BUSPROG:nAnalytic
STA:n DISC:nScarcity,ntradeoffs,nand nopportunity ncost
TOP:n OutstandingnEconomist:nThesenImportance nofnAdamnSmith,nthesenFathesernofnEconomic n
ScienceKEY:n Bloom's:n Knowledge
14. Thesen basicningredientsn in n any neconomic n decision n are
a. scarcity n and n choice.
b. surplusesn and n shortages.
c. marketn pricesn and n thesen usenof n efficientn production n methods.
d. needsn and n wants.
ANSWERED:n A PTS:n n 1 DIF: Moderate NAT:n BUSPROG:nAnalytic
, STA:n DISC:n Scarcity,n tradeoffs, n and n opportunity n cost
TOP:nWhen nisnEconomicsnAbout?n
KEY:n Bloom's:n Knowledge
15. Economic n choicenand n competitive n behaviorn aren thesen resultn of
a. scarcity.
b. poverty.
c. publicn ownership n of n resources.
d. private nownership nof n resources.
ANSWERED:n A PTS:n n 1 DIF: Moderate NAT:n BUSPROG:nAnalytic
STA:n DISC:n Scarcity,n tradeoffs, n and n opportunity n cost
TOP:nWhen nisnEconomicsnAbout?n
KEY:n Bloom's:n Knowledge
16. Forn thesen typicaln student,n takingnan n introductory n course n in neconomicsn should
a. turn nthesen studentn into n an n economist.
b. teach n thesen studentn solutionsn to nmostn socialn problems.
c. teach nthesen studentn hown to nansweredwern complex n socialn questions.
d. help nthesen studentn learn n to nrationally nanalyze n socialn problems.
e. Alln of n thesen aboven aren correct.
ANSWERED:n D PTS:n n 1 DIF: Moderate NAT:n BUSPROG:nAnalytic
STA:n DISC:n Scarcity,n tradeoffs, n and n opportunity n cost
TOP:nWhen nisnEconomicsnAbout?n
KEY:n Bloom's:n Comprehension
17. When n ansocietyncannotnproducenallnthesengoodsnand nservicesnpeoplenwishnto nhave,nitnisnsaid nthosent
heseeconomy n isn experiencing
a. scarcity.
b. shortages.
c. inefficiencies.
d. inequities.
ANSWERED:n A PTS:n n 1 DIF: Easy NAT:n BUSPROG:nAnalytic
STA:n DISC:n Scarcity,n tradeoffs, n and n opportunity n cost
TOP:nWhen nisnEconomicsnAbout?n
KEY:n Bloom's:n Knowledge
18. By nscientific n method n wen mean
a. thesenusen of n modern n electronic ntestingnequipmentn to nunderstand n thesen world.
b. thesendispassionate ndevelopmentn and n testingnof n theseoriesn aboutn hownthesen world n works.
c. thesenusen of n controlled n laboratory nexperimentsn to n understand nthesen way nthesen world nworks.
d. findingnevidence n to nsupportn preconceived n theseoriesn aboutn hownthesen world n works.
ANSWERED:n B PTS:n n 1 DIF: Moderate NAT:n BUSPROG:nAnalytic
STA:n DISC:n Scarcity,n tradeoffs,n and n opportunity n cost
TOP:n Thesen Economic nWay nof nThinking KEY:n Bloom's:n Comprehension
19. Economistsn maken assumptionsn in n ordern to
a. mimicn thesen methodologiesnemployed n by nothesern scientists.
b. minimize nthesen numbern of n experimentsn thosen yield n no n usefuln data.
c. minimize nthesen likelihood n thosen some n aspectn of n thesen problem n atn hand nisn beingn overlooked.
d. focusn theseirn thinkingn on nthesen essence n of n thesen problem n atn hand.
ANSWERED:n D PTS:n n 1 DIF: Moderate NAT:n BUSPROG:nAnalytic
STA:n DISC:n Scarcity,n tradeoffs,n and n opportunity n cost
TOP:n Thesen Economic nWay nof nThinking KEY:n Bloom's:n Comprehension
