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MicroEconomics 7e Paul Krugman, Robin Wells (Test Bank All Chapters, 100% Original Verified, A+ Grade) 1 / 4
Name:
Class:
Date:
TB7 Chapter 1
Page 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
- 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
. 2 / 4
Name:
Class:
Date:
TB7 Chapter 1
Page 2
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
- In a market economy, decisions made by the economy as a whole emerge from many individual choices.
- 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.
Which of these exemplifies this phenomenon?
ANSWER: d
- _____, 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
- _____ forces us to make choices.
- Opportunity cost
- Marginal decision making
- Scarcity
- Market failure
ANSWER: c
- 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.
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Name:
Class:
Date:
TB7 Chapter 1
Page 3
- 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
- would not exist if a central planning bureau were to decide how to allocate resources.
enough.
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.
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