2016 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed

© 2016 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.Chapter_01_What_Is_Economics True / False 1.Both parties gain in a voluntary exchange.

• True
• False

ANSWER: True

POINTS: 1

DIFFICULTY: Easy

LEARNING OBJECTIVES: DISC: Scarcity, tradeoffs, and o - DISC: Scarcity, tradeoffs, and opportunity cost NATIONAL STANDARDS: United States - BPROG: Analytic ACCREDITING STANDARDS: The study of economics, and defi - The study of economics, and definitions of economics TOPICS: DISC: Gains from trade, specialization and trade KEYWORDS: BLOOM'S: Knowledge 2.Even though international trade in undertaken voluntarily, a country that engages in trade may not benefit from it.

• True
• False

ANSWER: False

POINTS: 1

DIFFICULTY: Easy

LEARNING OBJECTIVES: DISC: Scarcity, tradeoffs, and o - DISC: Scarcity, tradeoffs, and opportunity cost NATIONAL STANDARDS: United States - BPROG: Analytic ACCREDITING STANDARDS: The study of economics, and defi - The study of economics, and definitions of economics TOPICS: DISC: Gains from trade, specialization and trade KEYWORDS: BLOOM's: Knowledge 3.In international trade, one country's gain is another country's loss.

• True
• False

ANSWER: False

POINTS: 1

DIFFICULTY: Easy

LEARNING OBJECTIVES: DISC: Scarcity, tradeoffs, and o - DISC: Scarcity, tradeoffs, and opportunity cost NATIONAL STANDARDS: United States - BPROG: Analytic ACCREDITING STANDARDS: The study of economics, and defi - The study of economics, and definitions of economics TOPICS: DISC: Gains from trade, specialization and trade KEYWORDS: BLOOM’S: Comprehension Economics Principles and Policy, 13e William Baumol, Alan Blinder (Test Bank All Chapters) 1 / 4

© 2016 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.

• It is impossible for both nations to gain when trading with one other.
• True
• False

ANSWER: False

POINTS: 1

DIFFICULTY: Easy

LEARNING OBJECTIVES: DISC: Scarcity, tradeoffs, and o - DISC: Scarcity, tradeoffs, and opportunity cost NATIONAL STANDARDS: United States - BPROG: Analytic ACCREDITING STANDARDS: The study of economics, and defi - The study of economics, and definitions of economics TOPICS: DISC: Gains from trade, specialization and trade KEYWORDS: BLOOM’S: Comprehension

• In economics the true cost of making a choice is the value of what must be given up.
• True
• False

ANSWER: True

POINTS: 1

DIFFICULTY: Easy

LEARNING OBJECTIVES: DISC: Scarcity, tradeoffs, and o - DISC: Scarcity, tradeoffs, and opportunity cost NATIONAL STANDARDS: United States - BPROG: Analytic ACCREDITING STANDARDS: The study of economics, and defi - The study of economics, and definitions of economics TOPICS: DISC: Gains from trade, specialization and trade KEYWORDS: BLOOM’S: Comprehension

• Opportunity cost is the value of the next best alternative to a given choice.
• True
• False

ANSWER: True

POINTS: 1

DIFFICULTY: Easy

LEARNING OBJECTIVES: DISC: Scarcity, tradeoffs, and o - DISC: Scarcity, tradeoffs, and opportunity cost NATIONAL STANDARDS: United States - BPROG: Analytic ACCREDITING STANDARDS: The study of economics, and defi - The study of economics, and definitions of economics TOPICS: DISC: Scarcity, tradeoffs, and opportunity cost KEYWORDS: BLOOM’S: Comprehension

• Opportunity cost is the highest possible price you can receive when you sell an object.
• True 2 / 4

© 2016 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.

• False

ANSWER: False

POINTS: 1

DIFFICULTY: Moderate

LEARNING OBJECTIVES: DISC: Scarcity, tradeoffs, and o - DISC: Scarcity, tradeoffs, and opportunity cost NATIONAL STANDARDS: United States - BPROG: Analytic ACCREDITING STANDARDS: The study of economics, and defi - The study of economics, and definitions of economics TOPICS: DISC: Scarcity, tradeoffs, and opportunity cost KEYWORDS: BLOOM’S: Comprehension

• As a student, one of the costs of sleeping in rather than going to class is likely to be a lower grade in the class.
• True
• False

ANSWER: True

POINTS: 1

DIFFICULTY: Moderate

LEARNING OBJECTIVES: DISC: Scarcity, tradeoffs, and o - DISC: Scarcity, tradeoffs, and opportunity cost NATIONAL STANDARDS: United States - BPROG: Analytic ACCREDITING STANDARDS: The study of economics, and defi - The study of economics, and definitions of economics TOPICS: DISC: Scarcity, tradeoffs, and opportunity cost KEYWORDS: BLOOM’S: Comprehension

• In her calculation of the cost of going to college, an economist would include the amount of forgone earnings over the

years spent at college.

• True
• False

ANSWER: True

POINTS: 1

DIFFICULTY: Moderate

LEARNING OBJECTIVES: DISC: Scarcity, tradeoffs, and o - DISC: Scarcity, tradeoffs, and opportunity cost NATIONAL STANDARDS: United States - BPROG: Analytic ACCREDITING STANDARDS: The study of economics, and defi - The study of economics, and definitions of economics

TOPICS: Ideas for Beyond the Final Exam

KEYWORDS: BLOOM’S: Comprehension

• Government controls over market prices frequently "backfire."
• True
• False

ANSWER: True 3 / 4

© 2016 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.

POINTS: 1

DIFFICULTY: Easy

LEARNING OBJECTIVES: DISC: Scarcity, tradeoffs, and o - DISC: Scarcity, tradeoffs, and opportunity cost NATIONAL STANDARDS: United States - BPROG: Analytic ACCREDITING STANDARDS: The study of economics, and defi - The study of economics, and definitions of economics TOPICS: DISC: Scarcity, tradeoffs, and opportunity cost KEYWORDS: BLOOM’S: Comprehension

• There are never any adverse consequences of government attempts to modify the laws of supply and demand.
• True
• False

ANSWER: False

POINTS: 1

DIFFICULTY: Easy

LEARNING OBJECTIVES: Ideas for Beyond the Final Exam

NATIONAL STANDARDS: United States - BPROG: Analytic ACCREDITING STANDARDS: The study of economics, and defi - The study of economics, and definitions of economics TOPICS: DISC: Monetary and fiscal policy KEYWORDS: BLOOM’S: Comprehension

• Comparative advantage explains how two nations can benefit from trade.
• True
• False

ANSWER: True

POINTS: 1

DIFFICULTY: Moderate

LEARNING OBJECTIVES: Ideas for Beyond the Final Exam

NATIONAL STANDARDS: United States - BPROG: Analytic ACCREDITING STANDARDS: The study of economics, and defi - The study of economics, and definitions of economics TOPICS: DISC: Gains from trade, specialization and trade KEYWORDS: BLOOM’S: Comprehension

• If Japan is twice as good at producing cameras and three times as good at producing TV sets as the United States,

Japan is said to have a comparative advantage in TV sets and the United States has a comparative advantage in cameras.

• True
• False

ANSWER: True

POINTS: 1

DIFFICULTY: Difficult

LEARNING OBJECTIVES: Ideas for Beyond the Final Exam

NATIONAL STANDARDS: United States - BPROG: Reflective Thinking - BPROG: Analysis

• / 4