Principles of Microeconomics Test Bank questions & answers 2024

Test Item File to Accompany
m m m m




Principles of Microe m m




conomicsTest Item F m m m




ile 2 m




Ninth Edition b
m m




y Case/Fair/Ost
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er




Prentice Hall m




c.2009
10/30/0
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8

,Contents
Chapterm1 ThemScopemandmMethodmofmEconomics 1
Chapterm2 ThemEconomicmProblem:mScarcitymandmChoice 29
Chapterm3 Demand,mSupply,mandmMarketmEquilibrium 55
Chapterm4 DemandmandmSupplymApplications 98
Chapterm5 Elasticity 117
Chapterm6 HouseholdmBehaviormandmConsumermChoice 135
Chapterm7 ThemProductionmProcess:mThemBehaviormofmProfit-MaximizingmFirms 171
Chapterm8 Short-RunmCostsmandmOutputmDecisions 207
Chapterm9 Long-RunmCostsmandmOutputmDecisions 252
Chapterm10 InputmDemand:mThemLabormandmLandmMarkets 292
Chapterm11 InputmDemand:mThemCapitalmMarketsmandmInvestmentmDecision 323
Chapterm12 GeneralmEquilibriummandmthemEfficiencymofmPerfectmCompetition 348
Chapterm13 MonopolymandmAntitrustmPolicy 377
Chapterm14 Oligopoly 425
Chapterm15 MonopolisticmCompetition 449
Chapterm16 Externalities,mPublicmGoods,mImperfectmInformation
,mandmSocialmChoice 476
Chapterm17 UncertaintymandmAsymmetricmInformation 517
Chapterm18 IncomemDistributionmandmPoverty 535
Chapterm19 PublicmFinance:mThemEconomicsmofmTaxation 563
Chapterm20 InternationalmTrade,mComparativemAdvantage,mandmProtectionism 592
Chapterm21 EconomicmGrowthminmDevelopingmandmTransitionalmEconomies 628

,Chapter 1 The Scope and Method of Economics
m m m m m m




1.1 WhymStudymEconomics?
1 Multiplem Choice

1) Them reasonsm tom studym economicsm includem whichm ofm them following?
A) tombemanminformedmvoter B)m tom understandm societym andm globalm affairs
C)m tomlearnmamwaymofmthinking
D)mallmofmthemabo
vemAnswer:m D
Diff:m1
Topic:m WhymStudymEconomics
?mSkill:m Fact

2) Marginalismm is
A) them bestm alternativem thatm wem foregom whenm makingm am decision.
B) themstudymofmhowmsocietiesmchoosemtomusemscarcemresources.
C) am marketm situationm inm whichm profitm opportunitiesm arem eliminatedm almostm instantaneously.
D) them processm ofm analyzingm them additionalm costsm orm benefitsm arisingm fromm am de
cision.mAnswer:m D
Diff:m1
Topic:m WhymStudymEconomics
?mSkill:m Definition

3) Economicsmismbestmdefinedmasmthemstudymof
A) financialm decision-making.
B) howm consumersm makem purchasingm decisions.
C) choicesm madem bym peoplem facedm withm scarcity.
D) inflation,m unemployment,m andm economicm growt
h.mAnswer:m C
Diff:m2
Topic:m WhymStudymEconomics
?mSkill:m Definition

4) ThemIndustrialmRevolutionmrefersmtomthemrisemofmthemmodernmfactorymsystemmin
duringmthemlatemeighteenthmandmearlymnineteenthmcenturies.
A) themUnitedmStates B)mEngland
C)m France D)mGermany
Answer:m B
Diff:m1
Topic:m WhymStudymEconomics
?mSkill:m Fact




1

, 5) Whichm ofm them followingm statementsm ism correct?
A) Economicsm ism am naturalm science.
B) Inm largem measure,m economicsm ism them studym ofm howm peoplem makem choices.
C) Ifm povertym wasm eliminatedm therem wouldm bem nom reasonm tom studym economics.
D) Economicm analysism canm bem usedm tom explainm howm societies,m butm notm individuals,
m makemdecisions.


Answer:m B
Diff:m1
Topic:m WhymStudymEconomics
?mSkill:m Fact

6) Economicsmismthemstudymof
A) howmtominvestminmthemstockmmarket.
B) howm societym usesm limitedm resources.
C) themrolemofmmoneyminmmarkets.
D) howm governmentm officialsm decidem whichm goodsm andm servicesm arem produ
ced.mAnswer:m B
Diff:m2
Topic:m WhymStudymEconomics
?mSkill:m Definition

7) Costsm thatm cannotm bem avoided,m becausem theym havem alreadym beenm incurredm arem knownm as
A) differentialmcosts. B)mmarginalmcosts.
C)m opportunitymcosts.
D)msunkmcost
s.mAnswer:m D
Diff:m2
Topic:m WhymStudymEconomics
?mSkill:m Definition

8) Supposemthatmtwom weeksmagomyoumpurchasedm amticketmtomthemsymphonymform$40.mLastm w
eekmsomeoneminvitedmyoum tomgomcampingmonmthemsamemnightmasmthemsymphonymconcert.m
Youm wouldmmuchmrathermgomcampingmthanmgomtomthemsymphony.mYoumhavemtriedmunsucc
essfullymtomsellmthemsymphonym concertm ticket.m Whichm ofm them followingm statementsm regardin
gm thism situationm ism correct?
A) Them $40m symphonym ticketm shouldm bem irrelevantm inm yourm decisionm making,m beca
usem itmrepresentsmthemmarginalmcostmofmgoingmcamping.
B) Them $40m youm paidm form them symphonym ticketm shouldm bem irrelevantm inm yourm decisionm
making,mbecausemitmismamsunkmcost.
C) Them$40myoumpaidmformthemsymphonymticketmismrelevantmtomthemdecision,masmthismrep
resentsmthemopportunitymcostmofmgoingmcamping.
D) Youm shouldm basem yourm decisionm onm whetherm orm notm goingm campingm willm providem yo
um withmmoremthanm$40minmsatisfaction.
Answer:m B
Diff:m2
Topic:m WhymStudymEconomics
?mSkill:m Conceptual
AACSB:m ReflectivemThinking




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