Name: Class: Date: - TB7 Chapter 1 Copyright Macmillan Learning. Pow...

Name: Class: Date: TB7 Chapter 1 Copyright Macmillan Learning. Powered by Cognero. Page 1 1.Which of these topics would be studied in macroeconomics?

• changes in airline travelers' vacation plans due to changes in the prices of airline tickets
• the effects of a tax reduction on the profits of Home Depot
• recessions
• unemployment among workers displaced as more firms move to cloud-based applications

ANSWER: c

2.The basic concern of microeconomics is to:

• ensure that the government pursues the public good during pandemics.
• make sure small businesses thrive.
• study the choices people make, given unlimited wants.
• determine how unlimited resources can best be used to satisfy limited wants.

ANSWER: c

3.How people choose among the alternatives available to them is:

• not part of the study of economics.
• impossible to describe.
• studied in microeconomics.
• unimportant to the study of microeconomics.

ANSWER: c

4.Which of these is a microeconomic topic?

• reasons why a consumer buys more cheese
• reasons why inflation is rising
• what the government will do to address unemployment
• the effect of the budget deficit on the rate of interest

ANSWER: a

5.Scarcity occurs in economics because:

• we often do not have sufficient resources to achieve our objectives.
• the wants of individual consumers are limited.
• there are poor people even in rich countries.
• taxes keep prices higher than they would otherwise be.

ANSWER: a

6.If resources are scarce:

• they are insufficient to provide enough goods and services to satisfy all human material wants and needs.
• there are not enough of them for firms to produce goods and services.
• they are probably overvalued by consumers.
• their supply is unlimited.

ANSWER: a

Economics 7e Paul Krugman, Robin Wells (Test Bank All Chapters, 100% Original Verified, A+ Grade) 1 / 4

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7.A central and fundamental theme in economics is that:

• for me to have something, someone else must be willing to give it up.
• the United States is a rich country, but we are simply not aware of it.
• there are not enough resources available to satisfy all the ways a society wants to use them.
• we can build as much as we want, since resources are unlimited.

ANSWER: c

8.In a market economy, decisions made by the economy as a whole emerge from many individual choices.Which of these exemplifies this phenomenon?

• The volume of work performed by the American workforce.
• The market demand for oranges.
• Whether a firm is profitable enough to remain in business.
• All of these exemplify this phenomenon.

ANSWER: d

9._____, that is, decisions by an individual about what to do and what not to do, is the basis for economics.

• Opportunity cost
• Utility
• Marginal choice
• Individual choice

ANSWER: d

10._____ forces us to make choices.

• Opportunity cost
• Marginal decision making
• Scarcity
• Market failure

ANSWER: c

11.In our interactions with other consumers (or individuals), we are forced to make choices because of:

• utility and demand exploitation.
• efficiency considerations.
• scarcity.
• decisions made at the margin.

ANSWER: c

12.Scarcity exists when:

• making choices among two or more alternatives is unnecessary (i.e., there is no opportunity cost).
• individuals can have as much of any good as they wish without giving up anything else.
• individuals can have more of a good only by giving up something else. 2 / 4

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• the trade-off that arises because resources are limited is not a consideration.

ANSWER: c

• There are many freshwater lakes in the United States. However, freshwater is scarce because:
• it has no alternative uses.
• there is not enough of it to meet all needs.
• the government limits its use through regulations.
• it has a high opportunity cost.

ANSWER: b

14. Fresh water is considered a scarce good because:

• not enough of it is available to meet all needs.
• it has limited uses.
• most fresh water is hard to access.
• it is mostly privately owned.

ANSWER: a

15. The problem of determining what goods and services society should produce:

• exists because we can produce any amount of a good we need or want, making choice difficult.
• exists because there are not enough resources to provide all the goods and services that people want.
• would not exist if all levels of government would agree to supply goods and services to those that do not have

enough.

• would not exist if a central planning bureau were to decide how to allocate resources.

ANSWER: b

• Which resource does NOT pertain to the production of avocados?
• fertile land on which to grow avocado trees
• workers to tend the land and water the plants
• equipment to aid planting and harvesting avocado trees
• income obtained from the sale of avocados

ANSWER: d

17. A resource is anything that:

• can be used to produce goods and services.
• you pay for.
• must be given up to get something else.
• can be consumed readily by a market participant.

ANSWER: a

18. We have to make choices because:

• we have unlimited income and must decide what to purchase.
• the resources available to us are scarce. 3 / 4

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• the resources we would like to use in production are infinite.
• with good planning, trade-offs can be avoided.

ANSWER: b

• A sushi chef prepares a California roll for a customer. Which of these factors is physical capital?
• the sushi chef
• the knife used to cut the sushi
• the ingredients used to prepare the dish
• the skills the sushi chef has acquired that enable them to perform this feat

ANSWER: b

• Susan is attending university and majoring in actuarial mathematics. Susan is thereby accumulating:
• land.
• labor.
• physical capital.
• human capital.

ANSWER: d

• Which item is NOT an example of a resource?
• land
• employees working for wages at your local McDonald's
• a factory used to make airplane engines
• a loaf of bread purchased at your local grocery store

ANSWER: d

• Which factor can BEST be described as a resource used to produce iPhones?
• money from investors
• wages of software engineers who code iPhones
• software engineers who code iPhones
• taxes on profits from the sale of iPhones

ANSWER: c

23. Opportunity cost is:

• the amount you pay to take advantage of a lucrative opportunity.
• a payment not made for a product.
• the benefit derived from a product.
• the value of the best alternative forgone in making a choice between alternatives.

ANSWER: d

24. The opportunity cost of a good is:

• smaller during periods of economic recession.
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