Test Bank for Microeconomics Principles A Business

Test Bank for Microeconomics Principles A Business Perspective, 1e Stephen Rubb, Scott Sumner (All Chapters Answer at the end of each Chapter) Chapter 1 Indicate the answer choice that best completes the statement or answers the question.

• Soybeans are traded in the _____ market.
• labor
• financial
• resource
• commodity

2. The factors of production are known as:

• natural resources, labor, physical capital, and entrepreneurship.
• natural resources, labor, physical capital, and output.
• labor, output, physical capital, and unions.
• output, labor, transportation, and entrepreneurship.

• The question of whether student loans should or should not be forgiven is an example of:
• marginal benefit.
• positive analysis.
• normative analysis.
• marginal cost.

• A farmer uses soil, seeds, a highly skilled foreman, tractors, and a barn to produce his harvest. Which factor

of production is the barn?

• entrepreneurship
• human capital
• natural resources
• physical capital

• Matthew is analyzing the production processes of the Boeing Company. Which branch of economics is

Matthew studying?

• managerial economics
• microeconomics
• nanoeconomics
• macroeconomics

6. Prices adjusted for inflation are:

• real.
• marginal.
• total.
• nominal.

• / 4

7. Inherited wealth is an example of:

• inequity.
• inefficiency.
• ineffectiveness.
• scarcity.

• The time insufficient to make all adjustments to new economic circumstances is known as:
• the long run.
• the short run.
• circumstantial.
• periodical.

• A farmer uses soil, seeds, a highly skilled foreman, tractors, and a barn to produce his harvest. Which factor

of production is the foreman?

• labor
• human capital
• natural resources
• physical capital

10. In economics, when a business increases investment, it is:

• raising money.
• purchasing equipment and machinery.
• selling stocks and bonds.
• purchasing stocks and bonds.

• A manufacturing firm that is producing at less than maximum output due to a government restriction on

hours of operation is operating:

• with less competition.
• at a loss.
• with fewer resources.
• inefficiently.

12. Producing as much as possible with available resources results is known as:

• scarcity.
• equity.
• efficiency.
• effectiveness.

• The eBay website uses technology and the Internet for its virtual marketplace, employs personnel to

maintain the technology, provides office space for employees, and has a founder who quit a lucrative career in another industry. Which factor of production is the founder?

• entrepreneurship
• human capital
• natural resources
• physical capital
• / 4

• Where does trade occur?
• primarily in foreign markets
• only among corporations
• in markets
• on Main Street

• _____ consists of all actual and potential buyers and sellers of a particular resource or product.
• An economy
• A society
• A country
• A market

• When Amazon builds its second headquarters, what is the effect on the economy?
• The amount of physical capital increases.
• Prices on goods and services increase.
• There is no effect on the economy.
• The firm's financial capital increases.

• Which of the following is an example of a microeconomic issue?
• a country's unemployment rate
• a country's inflation rate
• a country's trade deficit
• a decision by Boeing to open another plant

• Grace is considering the purchase of a dress with a price tag of $45.00. This is a _____ price.
• real
• marginal
• artificial
• nominal

• Amazon and eBay are examples of _____ markets.
• traditional
• retail
• online
• international

20. Economics is considered a social science primarily due to its:

• elements of psychology.
• consideration of how people behave in the broader society.
• lack of assumptions about human behavior.
• elements of sociology.

21. Fairness of output and income distribution is known as:

• equity. 3 / 4

• efficiency.
• effectiveness.
• scarcity.

• The market that consists of buyers and sellers of assets like stocks, bonds, and foreign currencies is known

as the:

• labor market.
• financial market.
• resource market.
• commodity market.

• Individuals who combine various resources into a business in pursuit of profit are known as:
• members of a union.
• farmers.
• employees.
• entrepreneurs.

• When human wants and needs exceed the resources that are available to meet those wants and needs, _____

occurs.

• equity
• scarcity
• efficiency
• allocation

• A farmer uses soil, seeds, a highly skilled foreman, tractors, and a barn to produce his harvest. Which factor

of production is the soil?

• natural resources
• human capital
• entrepreneurship
• physical capital

• When individuals, firms, and policymakers make decisions, these decisions often have both costs and

benefits. This is an example of:

• scarcity.
• trade-offs.
• equity.
• efficiency.

• Inputs that are found in nature and that can be used in the production process are known as:
• physical capital.
• human capital.
• natural resources.
• money.

• Economics starts with the premise that most humans are _____ and make decisions from which they expect
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