Copyright 2021 Pearson Education, Inc.

1 Copyright © 2021 Pearson Education, Inc.Economics Today, 20e (Miller) Chapter 1 The Nature of Economics 1.1 The Power of Economic Analysis 1) The economic way of thinking will help you

• make decisions in financing your home.
• analyze solutions to economic problems.
• make better decisions concerning your education.
• all of these

Answer: D

Diff: 1

Topic: 1.1 The Power of Economic Analysis

Learning Outcome: Micro-1: Identify the basic principles of economics and explain how to think like an economist

AACSB: Analytical thinking

2) Economic analysis is used

• only by instructors and students in economics to understand the world.
• only by business people to raise profits.
• only by policy makers to make policy decisions.
• in decision making.

Answer: D

Diff: 1

Topic: 1.1 The Power of Economic Analysis

Learning Outcome: Micro-1: Identify the basic principles of economics and explain how to think like an economist

AACSB: Analytical thinking

3) Economic analysis is a tool that

• aids decision making.
• helps us understand why people make mistakes.
• helps us forgive selfish people.
• makes everyone rich.

Answer: A

Diff: 1

Topic: 1.1 The Power of Economic Analysis

Learning Outcome: Micro-1: Identify the basic principles of economics and explain how to think like an economist

AACSB: Analytical thinking

Economics Today 20e Roger LeRoy Miller (Test Bank All Chapters, 100% Original Verified, A+ Grade) 1 / 4

2 Copyright © 2021 Pearson Education, Inc.4) Economics is best defined as the

• study of how people make choices to satisfy their wants.
• study of individual self-interests.
• study of why people do not react to incentives.
• process by which goods are sold in free markets.

Answer: A

Diff: 1

Topic: 1.1 The Power of Economic Analysis

Learning Outcome: Micro-1: Identify the basic principles of economics and explain how to think like an economist

AACSB: Analytical thinking

5) Economics can be described as the study of how people use ________ resources to satisfy ________ wants.

• unlimited; unlimited
• unlimited; limited
• limited; unlimited
• limited; limited

Answer: C

Diff: 1

Topic: 1.1 The Power of Economic Analysis

Learning Outcome: Micro-1: Identify the basic principles of economics and explain how to think like an economist

AACSB: Analytical thinking

6) Which statement most accurately describes economics?

• Economics is the study of how people make money.
• Economics is the study of how people make choices to satisfy their wants.
• Economics is the study of social values a society should choose.
• Economics is the study of how to eliminate scarcity.

Answer: B

Diff: 1

Topic: 1.1 The Power of Economic Analysis

Learning Outcome: Micro-1: Identify the basic principles of economics and explain how to think like an economist

AACSB: Analytical thinking 2 / 4

3 Copyright © 2021 Pearson Education, Inc.7) In economic analysis, people's resources are

• limited and their wants are unlimited.
• unlimited and their wants are also unlimited.
• limited and their wants are also limited.
• unlimited and their wants are limited.

Answer: A

Diff: 1

Topic: 1.1 The Power of Economic Analysis

Learning Outcome: Micro-1: Identify the basic principles of economics and explain how to think like an economist

AACSB: Analytical thinking

8) In economics, items that are used to produce goods and services are known as A)wants.

• needs.
• outputs.
• resources.

Answer: D

Diff: 1

Topic: 1.1 The Power of Economic Analysis

Learning Outcome: Micro-1: Identify the basic principles of economics and explain how to think like an economist

AACSB: Analytical thinking

9) In economics, all the items that people would consume if they had unlimited income are known as

• wants.
• aggregates.
• outputs.
• needs.

Answer: A

Diff: 1

Topic: 1.1 The Power of Economic Analysis

Learning Outcome: Micro-1: Identify the basic principles of economics and explain how to think like an economist

AACSB: Analytical thinking 3 / 4

4 Copyright © 2021 Pearson Education, Inc.10) In economics, ________ are limited but ________ are unlimited.

• wants; resources
• resources; wants
• money; ideas
• ideas; money

Answer: B

Diff: 1

Topic: 1.1 The Power of Economic Analysis

Learning Outcome: Micro-1: Identify the basic principles of economics and explain how to think like an economist

AACSB: Analytical thinking

11) Economics is the study of how

• people become selfish.
• preferences are determined.
• psychology influences preferences.
• people make choices.

Answer: D

Diff: 1

Topic: 1.1 The Power of Economic Analysis

Learning Outcome: Micro-1: Identify the basic principles of economics and explain how to think like an economist

AACSB: Analytical thinking

12) A fundamental aspect of economics is to

• ensure that every firm makes a profit.
• analyze how choices are made.
• satisfy all our wants.
• make sure that we always have sufficient resources.

Answer: B

Diff: 1

Topic: 1.1 The Power of Economic Analysis

Learning Outcome: Micro-1: Identify the basic principles of economics and explain how to think like an economist

AACSB: Analytical thinking

13) Economics is the study of

• how to get rich.
• how people allocate their limited resources to satisfy their unlimited wants.
• how people spend their income.
• why people want certain goods and services rather than other goods and services.

Answer: B

Diff: 1

Topic: 1.1 The Power of Economic Analysis

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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