Test Bank All - Grade) Name: Class: Date: Chapter 01 What Econo...

MicroEconomics, 14e Roger Arnold, Daniel Arnold, David Arnold (Test Bank All Chapters, 100% Original Verified, A+ Grade) 1 / 4

Name:

Class:

Date:

Chapter 01 What Economics Is About

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True / False

• The branch of economics that studies the decisions made by individuals and firms is called macroeconomics.
• True
• False

ANSWER: False

• Macroeconomics deals with issues involving large corporations, while microeconomics exclusively deals with issues

involving small businesses.

• True
• False

ANSWER: False

• The effect of a decrease in interest rates upon economic growth is an example of positive economics.
• True
• False

ANSWER: True

• Economists use the word utility to describe the satisfaction one receives from a good.
• True
• False

ANSWER: True

• If variable X rises as a result of variable Y falling, then X and Y have an inverse relationship.
• True
• False

ANSWER: True

• In the textbook, economics is defined as the "science of scarcity."
• True
• False

ANSWER: True

• In economics, capital is defined as a financial asset such as stocks and bonds.
• True
• False

ANSWER: False

• A rationing device is a method used to resolve who gets what of available goods and resources.
• True
• False

ANSWER: True

• When a person is making a decision at the margin he or she is comparing the total benefits from that activity to the total

costs of the proposed action. 2 / 4

Name:

Class:

Date:

Chapter 01 What Economics Is About

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• True
• False

ANSWER: False

• Economists use the terms resource and input as synonyms.
• True
• False

ANSWER: True

• To an economist, the terms factor and output are synonyms.
• True
• False

ANSWER: False

• According to economists, one of the four broad categories of resources is money.
• True
• False

ANSWER: False

• The higher the opportunity cost of doing something, the more likely it will be done.
• True
• False

ANSWER: False

• Price is the only rationing device that can be used in a modern economy.
• True
• False

ANSWER: False

• The resource termed labor consists of the physical, but not the mental, talents that people contribute to the production

process.

• True
• False

ANSWER: False

• The slope of a straight line is always equal to either 1.0 or -1.0.
• True
• False

ANSWER: False

• Economists sometimes refer to the resource category land as natural resources.
• True
• False

ANSWER: True

• / 4

Name:

Class:

Date:

Chapter 01 What Economics Is About

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• Scarcity affects everyone, even billionaires.
• True
• False

ANSWER: True

• If someone gives you a free ticket to the movies, then there is no opportunity cost involved with going to the movies.
• True
• False

ANSWER: False

• Some economic studies have shown that mandatory seat belt laws do not lead to a reduction in traffic fatalities.
• True
• False

ANSWER: True

• The slope of a horizontal line is always equal to zero.
• True
• False

ANSWER: True

• The slope of a (nonlinear) curve varies from one point to another.
• True
• False

ANSWER: True

• Scarcity occurs in both wealthy societies and poor societies.
• True
• False

ANSWER: True

• The higher the opportunity cost of making a new friend, the more likely one is to make a new friend, ceteris paribus.
• True
• False

ANSWER: False

• Economists use the terms resource and input as synonyms.
• True
• False

ANSWER: True

Multiple Choice

• The author of the textbook defines economics as the
• science of efficiency.
• science of scarcity.
• / 4