Answers At The End Of

Test Bank For Macroeconomics 9 th

Edition By David Colander (All Chapters, 100% Original Verified, A+ Grade) Answers At The End Of Each Chapter 1 / 4

1-1 © 2013 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.Chapter 01 Economics and Economic Reasoning True / False Questions 1.The answers to an economy's three central economic problems are determined by the interaction of three forces: economic forces, political forces, and social forces.True False 2.Scarcity exists because economies cannot produce enough to meet the perceived desires of all individuals.True False 3.Only marginal costs, not sunk costs, affect economic decisions if individuals are rational.True False 4.The economic decision rule is to undertake an action only when the marginal benefits of that action are greater than its total costs.True False 5.The opportunity cost of undertaking an activity includes any sunk cost.True False 2 / 4

1-2 © 2013 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.

6.The "invisible hand" is the price mechanism that guides people's actions in the market.True False 7.Social and political forces affect the way in which the invisible hand works.True False 8.Macroeconomics is the study of how individual choices are affected by economic forces.True False 9.Deciding what the distribution of income should be is an example of normative economics.True False Multiple Choice Questions 10.Say a pill existed that made people selfless. After taking it they were only interested in

others, not themselves. Under the coordination definition of economics:

• no economic problem would exist.
• there still would be an economic problem.
• there would be a political problem but not an economic problem.
• there would be a social problem but not an economic problem. 3 / 4

1-3 © 2013 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.

11.According to the text, economics is the study of how:

• governments allocate resources in the face of constraints.
• government policies can be used to meet individuals' wants and desires.
• human beings coordinate their wants and desires.
• scarce resources are allocated to their most productive uses.

12.Dorm rooms usually are not allocated by markets. Allocating dorm rooms is:

• not an economic problem.
• an economic problem.
• not affected by economic forces.
• determined by prices.

13.If allocating dorm rooms changes from allocation by lottery to allocation by the market:

• it becomes an economic problem.
• it becomes a political problem but not an economic problem.
• it becomes a social problem but not an economic problem.
• the allocation problem is still an economic problem.

14.Which of the following is not one of the three central coordination problems of the economy given in the book?

• What
• Whether
• For whom
• How
• / 4