C A government is an example of an economic agent.

Macroeconomics, 3e (Acemoglu/Laibson/List) Chapter 1 The Principles and Practice of Economics 1.1 The Scope of Economics 1) Which of the following statements is TRUE?A)All economic agents are necessarily individuals.

• A worker who shirks work is not an economic agent.
• A government is an example of an economic agent.
• A street gang is not an economic agent.

Answer: C

Difficulty: Easy

AACSB: Analytical Thinking

Topic: Economic Agents and Economic Resources

2) Which of the following best describes scarce resources?A)Resources that most people cannot afford to buy B)Resources that can only be distributed efficiently by the government C)Resources for which the quantity demanded is the same for all economic agents D)Resources for which the quantity that people want exceeds the quantity that is freely available

Answer: D

Difficulty: Easy

AACSB: Analytical Thinking

Topic: Economic Agents and Economic Resources

3) Which of the following is NOT a scarce resource?

• Gold
• Pollution
• Petroleum
• iPhones

Answer: B

Difficulty: Easy

AACSB: Application of Knowledge

Topic: Economic Agents and Economic Resources

4)In economics, scarcity refers to the situation of ________.

• making the best use of limited information
• having more wants than the amount of available resources
• the government rationing available goods and services
• sellers setting the prices of their products too high for people to be able to afford them

Answer: B

Difficulty: Medium

AACSB: Analytical Thinking

Topic: Economic Agents and Economic Resources

MacroEconomics 3e Daron Acemoglu, David Laibson, John List (Test Bank All Chapters, 100% Original Verified, A+ Grade) 1

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5) Which of the following statements is TRUE?

• Gold is not a scarce resource.
• Both life-saving drugs and ice cream are examples of scarce goods.

C)If a scarce resource is given away for free, everyone will be able to consume it.

• Scarcity means that there is an imbalance between unlimited resources and limited wants.

Answer: B

Difficulty: Easy

AACSB: Analytical Thinking

Topic: Economic Agents and Economic Resources

6) What are scarce resources? Why are economic agents concerned with the allocation of these resources?Answer: Scarce resources are resources for which the quantity that agents want exceeds the quantity that is freely available. Economic agents need to satisfy their unlimited wants in a world of limited resources. This makes it important for them to understand how these scarce resources are to be used and distributed in order to optimize allocation.

Difficulty: Easy

AACSB: Analytical Thinking

Topic: Economic Agents and Economic Resources

7)Define economics. Who are economic agents?Answer: Economics is the study of how agents choose to allocate scarce resources and how these choices affect society. An economic agent is an individual or a group that makes choices.

Difficulty: Easy

AACSB: Analytical Thinking

Topic: Economic Agents and Economic Resources

8) Economics is primarily the study of ________.A)the mental functions and behavior of individuals and groups

• the state, nation, government, and politics and policies of governments

C)the problems related to the existence and evolution of society

• how agents choose to allocate scarce resources and how these choices affect society

Answer: D

Difficulty: Easy

AACSB: Analytical Thinking

Topic: Definition of Economics

9)Economics is primarily the study of ________.A)the relationship between matter and its motion B)agents' choices and their impact on society

• events of the past and how these events affect present human behavior
• the different types of governments and the impact of their policies on a nation

Answer: B

Difficulty: Easy

AACSB: Analytical Thinking

Topic: Definition of Economics

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10) ________ is analysis that generates objective descriptions or predictions about the world that can be verified with data.

• Positive economics
• Negative economics
• Microeconomics
• Normative economics

Answer: A

Difficulty: Easy

AACSB: Analytical Thinking

Topic: Positive Economics and Normative Economics

11) Which of the following is an example of a positive economic statement?

• The pricing policies followed in single-producer markets should be strictly supervised.
• Unemployment is more harmful than inflation.
• Higher interest rates will encourage more savings.
• Pollution is one of the most serious economic problems.

Answer: C

Difficulty: Medium

AACSB: Application of Knowledge

Topic: Positive Economics and Normative Economics

12) Which of the following is an example of a positive economic statement?

• The government should ideally work as a welfare state.
• An increase in income causes an increase in savings.
• Economics is the most useful social science.
• Eliminating poverty is more important than reducing inflation.

Answer: B

Difficulty: Medium

AACSB: Application of Knowledge

Topic: Positive Economics and Normative Economics

13) ________ economics prescribes what an individual or society ought to do.

• Positive
• Negative
• Behavioral
• Normative

Answer: D

Difficulty: Easy

AACSB: Analytical Thinking

Topic: Positive Economics and Normative Economics

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14) Which of the following is an example of a normative economic statement?

• A cut in the tax rate will lead to an increase in consumption.
• Relaxation of import duties will encourage imports.
• An increase in subsidies to farmers will boost agricultural production.
• An increase in social security benefits will increase the welfare of all economic agents.

Answer: D

Difficulty: Medium

AACSB: Application of Knowledge

Topic: Positive Economics and Normative Economics

15) Which of the following is an example of a normative economic statement?

• An increase in government expenditure will lead to an increase in well-being.
• An increase in the money supply will lead to an increase in the inflation rate.
• An increase in income is accompanied by an increase in savings.
• An increase in income is accompanied by an increase in consumption.

Answer: A

Difficulty: Medium

AACSB: Application of Knowledge

Topic: Positive Economics and Normative Economics

16) Which of the following statements is TRUE?

• Positive economics deals with issues that are subjective.
• Normative statements depend on personal preferences.
• Positive economics recommends what people ought to do.
• Normative economic statements can be confirmed or disproven.

Answer: B

Difficulty: Easy

AACSB: Analytical Thinking

Topic: Positive Economics and Normative Economics

17) Which of the following statements correctly differentiates between positive and normative economics?

• Positive economics is descriptive, whereas normative economics is advisory.
• Positive economics describes what people ought to do, whereas normative economics describes what

people actually do.

• Positive economics is based on judgments, whereas normative economics is not.
• Positive economics can only be applied to microeconomics, whereas normative economics can be

applied to both microeconomics and macroeconomics.

Answer: A

Difficulty: Easy

AACSB: Analytical Thinking

Topic: Positive Economics and Normative Economics

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