Question 1

(Last Word) A caller to a radio talk show states that oil companies are "greedy price gougers." This is an example of

Accepted Answer

A) loaded terminology. 
B) the "after this, therefore because of this fallacy." 
C) the fallacy of composition. 
D) the economic perspective. 
A) loaded terminology. 
B) the "after this, therefore because of this fallacy." 
C) the fallacy of composition. 
D) the economic perspective.

Question 2

The fact that the slope of the production possibilities curve becomes steeper as we move down along the curve indicates that

Accepted Answer

A) the principle of increasing opportunity costs is relevant. 
B) society's resources are limited. 
C) the opportunity cost of producing each product is constant. 
D) resources are perfectly substitutable between alternative uses. 
A) the principle of increasing opportunity costs is relevant. 
B) society's resources are limited. 
C) the opportunity cost of producing each product is constant. 
D) resources are perfectly substitutable between alternative uses.

Question 3

If economic theories are solidly based on relevant facts, then appropriate economic policy becomes obvious and uncontroversial.

Accepted Answer

A) True 
 B)False

Question 4

The budget line shows the various incomes that an individual can earn from different jobs.

Accepted Answer

A) True 
 B)False

Question 5

Economic growth is shown as an increase in production from inside the production possibilities curve out toward a point on the possibilities curve.

Accepted Answer

A) True 
 B)False

Question 6

Normative statements are concerned primarily with

Accepted Answer

A) facts and theories. 
B) what ought to be. 
C) what is. 
D) rational choice involving costs and benefits. 
A) facts and theories. 
B) what ought to be. 
C) what is. 
D) rational choice involving costs and benefits.

Question 7

The slope of a graph that shows a direct relationship is

Accepted Answer

A) always positive. 
B) either positive or negative. 
C) possibly zero. 
D) either zero or infinite. 
A) always positive. 
B) either positive or negative. 
C) possibly zero. 
D) either zero or infinite.

Question 8

In drawing a particular budget line, money income and the prices of the two products are fixed.Test Bank: I Topic: Unemployment, Growth, and the Future

Accepted Answer

A) True 
 B)False

Question 9

Which of the following is assumed in constructing a typical production possibilities curve?

Accepted Answer

A) The economy is using its resources inefficiently. 
B) Resources are perfectly shiftable among alternative uses. 
C) Production technology is fixed. 
D) The economy is engaging in international trade. 
A) The economy is using its resources inefficiently. 
B) Resources are perfectly shiftable among alternative uses. 
C) Production technology is fixed. 
D) The economy is engaging in international trade.

Question 10

Which of the following lists includes only capital resources (and therefore no labor or land resources)?

Accepted Answer

A) an ice arena, a professional hockey player, hockey uniforms 
B) the owner of a new start-up firm, a chemistry lab, a researcher 
C) a hydroelectric dam, water behind the dam, power lines 
D) autos owned by a car rental firm, computers at the car rental agency, vans used to shuttle rental customers to and from the airport 
A) an ice arena, a professional hockey player, hockey uniforms 
B) the owner of a new start-up firm, a chemistry lab, a researcher 
C) a hydroelectric dam, water behind the dam, power lines 
D) autos owned by a car rental firm, computers at the car rental agency, vans used to shuttle rental customers to and from the airport

Question 11

Which of the following is a microeconomic statement?

Accepted Answer

A) The real domestic output increased by 1.6 percent last year. 
B) Unemployment was 5.2 percent of the labor force last year. 
C) The price of smartphones declined 2.8 percent last year. 
D) The general price level increased by 1.1 percent last year. 
A) The real domestic output increased by 1.6 percent last year. 
B) Unemployment was 5.2 percent of the labor force last year. 
C) The price of smartphones declined 2.8 percent last year. 
D) The general price level increased by 1.1 percent last year.

Question 12

Economic principles are value judgments about what the economy should be like or the way the economic world ought to be.

Accepted Answer

A) True 
 B)False

Question 13

When a nation is under-allocating resources to the production of a good, then the

Accepted Answer

A) marginal benefit is greater than the marginal cost of the good. 
B) marginal benefit is less than the marginal cost of the good. 
C) marginal cost of producing the good is decreasing. 
D) marginal benefit of producing the good is increasing. 
A) marginal benefit is greater than the marginal cost of the good. 
B) marginal benefit is less than the marginal cost of the good. 
C) marginal cost of producing the good is decreasing. 
D) marginal benefit of producing the good is increasing.

Question 14

The study of global businesses such as Apple Inc is one major focus of macroeconomic analysis.

Accepted Answer

A) True 
 B)False

Question 15

On a production possibilities curve, the single optimal or best combination of output for any society

Accepted Answer

A) is at a point near the top of the curve. 
B) is at the precise midpoint of the curve. 
C) is at a point near the bottom of the curve. 
D) depends upon the preferences of society. 
A) is at a point near the top of the curve. 
B) is at the precise midpoint of the curve. 
C) is at a point near the bottom of the curve. 
D) depends upon the preferences of society.

Question 16

The alternative combinations of two goods that a consumer can purchase with a specific money income is shown by

Accepted Answer

A) a production possibilities curve. 
B) a demand curve. 
C) a consumer expenditure line. 
D) a budget line. 
A) a production possibilities curve. 
B) a demand curve. 
C) a consumer expenditure line. 
D) a budget line.

Question 17

If falling gasoline prices are good for the consumers, then they must be good everyone in the economy.

Accepted Answer

A) True 
 B)False

Question 18

(Last Word) The fallacy of composition is essentially the error of

Accepted Answer

A) omitting relevant variables in constructing a model. 
B) reasoning from the general to the particular. 
C) confusing cause and effect in economic relationships. 
D) generalizing from the particular to the general.Topic: Theories, Principles, and Models 
A) omitting relevant variables in constructing a model. 
B) reasoning from the general to the particular. 
C) confusing cause and effect in economic relationships. 
D) generalizing from the particular to the general.Topic: Theories, Principles, and Models

Question 19

The main function of the entrepreneur is to

Accepted Answer

A) make routine pricing decisions. 
B) innovate. 
C) purchase capital. 
D) create market demanD. 
A) make routine pricing decisions. 
B) innovate. 
C) purchase capital. 
D) create market demanD.

Question 20

Which of the following illustrates a macroeconomic question?

Accepted Answer

A) Should the salaries of financial executives be regulated by the government? 
B) Are increasing wage demands by workers contributing to price inflation? 
C) What is the least costly way to produce automobiles and trucks in the United States? 
D) Will the introduction of a new computer chip change the demand for computers? 
A) Should the salaries of financial executives be regulated by the government? 
B) Are increasing wage demands by workers contributing to price inflation? 
C) What is the least costly way to produce automobiles and trucks in the United States? 
D) Will the introduction of a new computer chip change the demand for computers?

Exam 1: Limits, Alternatives, and Choices

(Last Word) A caller to a radio talk show states that oil companies are "greedy price gougers." This is an example of

The fact that the slope of the production possibilities curve becomes steeper as we move down along the curve indicates that

If economic theories are solidly based on relevant facts, then appropriate economic policy becomes obvious and uncontroversial.

The budget line shows the various incomes that an individual can earn from different jobs.

Economic growth is shown as an increase in production from inside the production possibilities curve out toward a point on the possibilities curve.

Normative statements are concerned primarily with

The slope of a graph that shows a direct relationship is

In drawing a particular budget line, money income and the prices of the two products are fixed.Test Bank: I Topic: Unemployment, Growth, and the Future

Which of the following is assumed in constructing a typical production possibilities curve?

Which of the following lists includes only capital resources (and therefore no labor or land resources)?

Which of the following is a microeconomic statement?

Economic principles are value judgments about what the economy should be like or the way the economic world ought to be.

When a nation is under-allocating resources to the production of a good, then the

The study of global businesses such as Apple Inc is one major focus of macroeconomic analysis.

On a production possibilities curve, the single optimal or best combination of output for any society

The alternative combinations of two goods that a consumer can purchase with a specific money income is shown by

If falling gasoline prices are good for the consumers, then they must be good everyone in the economy.

(Last Word) The fallacy of composition is essentially the error of

The main function of the entrepreneur is to

Which of the following illustrates a macroeconomic question?

The Market System and the Circular Flow

Demand, Supply, and Market Equilibrium

Market Failures: Public Goods and Externalities

Governments Role and Government Failure

Elasticity

Utility Maximization

Behavioral Economics

Businesses and the Costs of Production

Pure Competition in the Short Run

Pure Competition in the Long Run

Pure Monopoly

Monopolistic Competition

Oligopoly and Strategic Behavior

Technology, Rd, and Efficiency

The Demand for Resources

Wage Determination

Rent, Interest, and Profit

Natural Resource and Energy Economics

Public Finance: Expenditures and Taxes

Antitrust Policy and Regulation

Agriculture: Economics and Policy

Income Inequality, Poverty, and Discrimination

Health Care

Immigration

An Introduction to Macroeconomics

Measuring Domestic Output and National Income

Economic Growth

Business Cycles, Unemployment, and Inflation

Basic Macroeconomic Relationships

The Aggregate Expenditures Model

Aggregate Demand and Aggregate Supply

Fiscal Policy, Deficits, and Debt

Money, Banking, and Financial Institutions

Money Creation

Interest Rates and Monetary Policy

Financial Economics

Extending the Analysis of Aggregate Supply

Current Issues in Macro Theory and Policy

International Trade

The Balance of Payments, Exchange Rates, and Trade Deficits

The Economics of Developing Countries

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