Essentials of Economics – 7th Edition
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TEST BANK
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Glenn Hubbard
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Comprehensive Test Bank for Instructors
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and Students
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© Glenn Hubbard
All rights reserved. Reproduction or distribution without permission is prohibited.
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©STUDYSTREAM
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This work is protected by United States copyright laws and is provided
solely for the use of instructors in teaching their courses and assessing
student learning. Dissemination or sale of any part of this work (including
on the World Wide Web) will destroy the integrity of the work and is not
permitted. The work and materials from it should never be made available
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to students except by instructors using the accompanying text in their
classes. All recipients of this work are expected to abide by these
restrictions and to honor the intended pedagogical purposes and the needs
of other instructors who rely on these materials.
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Director of Portfolio Management: Adrienne D’Ambrosio
Specialist Portfolio Manager: David Alexander
Editorial Assistant: Nicole Nedwidek
Content Producer: Christine Donovan
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Copyright © 2019 by Pearson Education, Inc. or its affiliates. All Rights Reserved. Manufactured
in the United States of America. This publication is protected by copyright, and permission
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should be obtained from the publisher prior to any prohibited reproduction, storage in a retrieval
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recording, or otherwise. For information regarding permissions, request forms, and the
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please visit www.pearsoned.com/permissions/.
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PEARSON, ALWAYS LEARNING, and MYLAB are exclusive trademarks owned by Pearson
Education, Inc. or its affiliates in the U.S. and/or other countries.
Unless otherwise indicated herein, any third-party trademarks, logos, or icons that may appear in
this work are the property of their respective owners, and any references to third-party
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trademarks, logos, icons, or other trade dress are for demonstrative or descriptive purposes only.
Such references are not intended to imply any sponsorship, endorsement, authorization, or
promotion of Pearson’s products by the owners of such marks, or any relationship between the
owner and Pearson Education, Inc., or its affiliates, authors, licensees, or distributors.
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, Economics 2019 (Hubbard/O'Brien)
Chapter 1 Economics: Foundations and Models
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1.1 Three Key Economic Ideas
1) Ford assembles some cars in Mexico because the lower wages the company pays to Mexican workers
and the lower prices it pays for auto parts in Mexico reduces Ford's costs. This is an example of Ford
reacting to which of the three key economic ideas?
UV
A) People are rational.
B) People respond to economic incentives.
C) Optimal decisions are made at the margin.
D) Firms attempt to maximize revenues.
Answer: B
Diff: 2 Page Ref: 2
IA
Topic: Scarcity
Learning Outcome: Micro-1: Identify the basic principles of economics and explain how to think like an economist
AACSB: Analytical thinking
Special Feature: Chapter Opener: Why Does Ford Assemble Cars in Both the United States and Mexico?
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2) In economics, choices must be made because we live in a world of
A) unemployment.
B) scarcity.
C) greed.
D) unlimited resources.
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Answer: B
Diff: 1 Page Ref: 4
Topic: Scarcity
*: Recurring
Learning Outcome: Micro-1: Identify the basic principles of economics and explain how to think like an economist
RO
AACSB: Analytical thinking
3) Which of the following statements about scarcity is true?
A) Scarcity refers to the situation in which unlimited wants exceed limited resources.
B) Scarcity is not a problem for the wealthy.
C) Scarcity is only a problem when a country has too large a population.
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D) Scarcity only arises when there is a wide disparity in income distribution.
Answer: A
Diff: 1 Page Ref: 4
Topic: Scarcity
*: Recurring
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Learning Outcome: Micro-1: Identify the basic principles of economics and explain how to think like an economist
AACSB: Analytical thinking
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Copyright © 2019 Pearson Education, Inc.
ST
TEST BANK
UV
IA
_A
Glenn Hubbard
PP
Comprehensive Test Bank for Instructors
RO
and Students
VE
© Glenn Hubbard
All rights reserved. Reproduction or distribution without permission is prohibited.
D?
??
©STUDYSTREAM
,ST
This work is protected by United States copyright laws and is provided
solely for the use of instructors in teaching their courses and assessing
student learning. Dissemination or sale of any part of this work (including
on the World Wide Web) will destroy the integrity of the work and is not
permitted. The work and materials from it should never be made available
UV
to students except by instructors using the accompanying text in their
classes. All recipients of this work are expected to abide by these
restrictions and to honor the intended pedagogical purposes and the needs
of other instructors who rely on these materials.
IA
Director of Portfolio Management: Adrienne D’Ambrosio
Specialist Portfolio Manager: David Alexander
Editorial Assistant: Nicole Nedwidek
Content Producer: Christine Donovan
_A
Copyright © 2019 by Pearson Education, Inc. or its affiliates. All Rights Reserved. Manufactured
in the United States of America. This publication is protected by copyright, and permission
PP
should be obtained from the publisher prior to any prohibited reproduction, storage in a retrieval
system, or transmission in any form or by any means, electronic, mechanical, photocopying,
recording, or otherwise. For information regarding permissions, request forms, and the
appropriate contacts within the Pearson Education Global Rights and Permissions department,
please visit www.pearsoned.com/permissions/.
RO
PEARSON, ALWAYS LEARNING, and MYLAB are exclusive trademarks owned by Pearson
Education, Inc. or its affiliates in the U.S. and/or other countries.
Unless otherwise indicated herein, any third-party trademarks, logos, or icons that may appear in
this work are the property of their respective owners, and any references to third-party
VE
trademarks, logos, icons, or other trade dress are for demonstrative or descriptive purposes only.
Such references are not intended to imply any sponsorship, endorsement, authorization, or
promotion of Pearson’s products by the owners of such marks, or any relationship between the
owner and Pearson Education, Inc., or its affiliates, authors, licensees, or distributors.
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PP
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UV
ST
, Economics 2019 (Hubbard/O'Brien)
Chapter 1 Economics: Foundations and Models
ST
1.1 Three Key Economic Ideas
1) Ford assembles some cars in Mexico because the lower wages the company pays to Mexican workers
and the lower prices it pays for auto parts in Mexico reduces Ford's costs. This is an example of Ford
reacting to which of the three key economic ideas?
UV
A) People are rational.
B) People respond to economic incentives.
C) Optimal decisions are made at the margin.
D) Firms attempt to maximize revenues.
Answer: B
Diff: 2 Page Ref: 2
IA
Topic: Scarcity
Learning Outcome: Micro-1: Identify the basic principles of economics and explain how to think like an economist
AACSB: Analytical thinking
Special Feature: Chapter Opener: Why Does Ford Assemble Cars in Both the United States and Mexico?
_A
2) In economics, choices must be made because we live in a world of
A) unemployment.
B) scarcity.
C) greed.
D) unlimited resources.
PP
Answer: B
Diff: 1 Page Ref: 4
Topic: Scarcity
*: Recurring
Learning Outcome: Micro-1: Identify the basic principles of economics and explain how to think like an economist
RO
AACSB: Analytical thinking
3) Which of the following statements about scarcity is true?
A) Scarcity refers to the situation in which unlimited wants exceed limited resources.
B) Scarcity is not a problem for the wealthy.
C) Scarcity is only a problem when a country has too large a population.
VE
D) Scarcity only arises when there is a wide disparity in income distribution.
Answer: A
Diff: 1 Page Ref: 4
Topic: Scarcity
*: Recurring
D?
Learning Outcome: Micro-1: Identify the basic principles of economics and explain how to think like an economist
AACSB: Analytical thinking
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1
Copyright © 2019 Pearson Education, Inc.
