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Principles of Microeconomics Thirteenth Edition Karl E. Case Ray C. Fair Sharon M. Oster Principles of Microeconomics, 13e Revised by Randy Methenitis & Richard Gosslin Test Bank For 1 / 4

Principles of Microeconomics, 13e (Case/Fair/Oster) Chapter 1 The Scope and Method of Economics

1.1 Why Study Economics?

1) Which of the following is not listed in the book as a reason to study economics?

• to learn a way of thinking
• to understand society
• to be an informed citizen
• to learn how to make lots of money

Answer: D

Diff: 1

Topic: Why Study Economics?

Skill: Fact

Learning Outcome: Micro-1

2) Among the fundamental concepts in economics is

• opportunity cost.
• marginalism.
• efficient markets.
• all of the above

Answer: D

Diff: 1

Topic: Why Study Economics?

Skill: Conceptual

AACSB: Reflective Thinking

Learning Outcome: Micro-1

3) Which of the following is the best definition of economics?

• the study of how individuals and societies choose to use the scarce resources that nature and

previous generations have provided

• the study of how consumers spend their income
• the study of how business firms decide what inputs to hire and what outputs to produce
• the study of how the federal government allocates tax dollars

Answer: A

Diff: 1

Topic: Why Study Economics?

Skill: Definition

Learning Outcome: Micro-1

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4) The rise of the modern factory system in England during the late eighteenth and early nineteenth centuries is known as the

• Great Migration.
• Industrial Revolution.
• Wealth of Nations.
• Dark Ages.

Answer: B

Diff: 1

Topic: Why Study Economics?

Skill: Fact

Learning Outcome: Micro-1

5) Which of the following statements is not correct?

• Economics is a behavioral science.
• In large measure, economics is the study of how people make choices.
• If poverty were eliminated, there would be no reason to study economics.
• Economic analysis can be used to explain how both individuals and societies make decisions.

Answer: C

Diff: 1

Topic: Why Study Economics?

Skill: Conceptual

AACSB: Reflective Thinking

Learning Outcome: Micro-1

6) The study of economics

• is a very narrow endeavor.
• is a way of analyzing decision-making processes caused by scarcity.
• is concerned with proving that capitalism is better than socialism.
• focuses on how a business should function.

Answer: B

Diff: 1

Topic: Why Study Economics?

Skill: Definition

Learning Outcome: Micro-1

7) Which of the following is not one of the three fundamental concepts of economics?

• profit maximization
• marginalism
• opportunity cost
• the working of efficient markets

Answer: A

Diff: 1

Topic: Why Study Economics?

Skill: Conceptual

Learning Outcome: Micro-1

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8) Suppose that you purchased a ticket to a jazz festival for $100 from an online ticket broker.Once you arrived at the festival, you discovered that parking costs you an additional $15. In this situation, the additional $15 you pay for parking is an example of

• an economic loss.
• opportunity cost.
• marginal cost.
• an inefficient cost.

Answer: C

Diff: 2

Topic: Why Study Economics?

Skill: Conceptual

AACSB: Reflective Thinking

Learning Outcome: Micro-1

9) You have decided that you want to attend a costume party as Black Panther. You estimate that it will cost $40 to assemble your costume. After spending $40 on the costume, you realize that the additional pieces you need will cost you $25 more. The marginal cost of completing the costume is

A) $15.

B) $25.

C) $40.

D) $65.

Answer: B

Diff: 2

Topic: Why Study Economics?

Skill: Analytical

AACSB: Analytical Thinking

Learning Outcome: Micro-1

10) The concept of opportunity cost

• is relevant only to economics.
• can be applied to the analysis of any decision-making process.
• applies to consumers but not to firms.
• refers only to actual payments and incomes.

Answer: B

Diff: 1

Topic: Why Study Economics?

Skill: Conceptual

AACSB: Reflective Thinking

Learning Outcome: Micro-1

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