chapter_01_-_what_do_economists_do

chapter_01_-_what_do_economists_do - Test Bank...

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Page 1 of 7 Test Bank Macroeconomics: Theory and Policy Chapter 01: What Do Economists Do? We Model for Food B. Modjtahedi Question 1 Which of the following is the correct economic definition of scarcity? A. People do not have enough money to buy all the goods they want to buy. B. Firms do not have enough time to produce all the goods people want to buy. C. Scarcity happens occasionally when the amount of total production falls short of what people want to buy. D. Scarcity means human materials wants are unlimited but resources to satisfy them are limited. E. None of the above. Question 2 To produce more military equipment, the society needs to produce fewer dishwashers. This is because of: A. Scarcity B. Diminishing returns C. Explicit marginal cost of producing dishwashers D. Implicit marginal cost of producing dishwashers E. None of the above. Question 3 Which of the following statements is correct? A. Human wants are “unlimited” only in the sense that with the existing amount of resources we cannot satisfy them all. B. If the amount of resources and human wants were both limited, we would not have scarcity. C. If human wants were limited, we would not have scarcity. D. If resources were limited, but enough to satisfy all the human material wants, we would still call the situation scarcity. E. None of the above. Question 4 Politicians debate whether to allocate the society’s resources to build more schools or to provide more healthcare services. This decision problem is the result of: A. Limited resources and limited wants. B. Scarcity. C. Political inefficiency. D. Political bickering. E. None of the above. Question 5 Which of the following is the correct list of production factors? A. Land, labor, money, and capital. B. Land, labor, money, stocks, and bonds. C. Land, labor, and capital. D. Labor and capital.
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Page 2 of 7 E. None of the above. Question 6 Which of the following is the correct list of production factors? A. Land and labor. B. Land, labor, and money. C. Land, labor, and capital. D. Land and capital. E. None of the above. Question 7 What do economists mean by “land” as a production factor? A. They mean all the resources given to us by the nature. B. They mean natural resources. C. They mean land itself that is used in agriculture as well as forests, underground resources, minerals, and underwater resources. D.
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This note was uploaded on 03/09/2010 for the course ECN 001B 1b taught by Professor Baghermodjtahedi during the Spring '10 term at UC Davis.

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chapter_01_-_what_do_economists_do - Test Bank...

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