Ch01 - CHAPTER 1 Preliminaries MULTIPLE CHOICE Section 1.1...

Info iconThis preview shows pages 1–3. Sign up to view the full content.

View Full Document Right Arrow Icon
CHAPTER 1 Preliminaries MULTIPLE CHOICE Section 1.1 easy 1. Microeconomics is the branch of economics that deals with which of the following topics? a. The behavior of individual consumers b. Unemployment and interest rates c. The behavior of individual firms and investors d. (b) and (c) e. (a) and (c) easy 2. A Rolling Stones song goes: “You can’t always get what you want.” This echoes an important theme from microeconomics. Which of the following statements is the best example of this theme? a. Consumers must make the best purchasing decisions they can, given their limited incomes. b. Workers do not have as much leisure as they would like, given their wages and working conditions. c. Workers in planned economies, such as North Korea, do not have much choice over jobs. d. Firms in market economies have limited financial resources. moderate 3. Economics is about the allocation of scarce resources. Which of the following is NOT an example of economic scarcity? a. If Steve goes to see the movie Master and Commander on Saturday, he will not be able to afford buying ice cream. b. If Jenny studies for her economics quiz this evening, she will not have time to walk her dog. c. If General Motors increases its production of SUV’s this year, it will have to spend more on advertising. d. If Borders Books increases the number of titles it carries, it will have to reallocate shelf space to accommodate the new titles. easy 4. A valid and useful theory of gold prices: a. Helps to predict the movements of gold prices over time. b. May be founded on simplifying assumptions. c. Need not exactly predict every change in gold prices. d. All of the above. e. None of the above. easy 5. Use the following two statements to answer this question: I. Economic theories are developed to explain observed phenomena by deducing from a set of basic rules and assumptions. II. Economic theories use value judgments to determine which people ought to pay more taxes. a. Both I and II are true. b. I is true, and II is false. c. I is false, and II is true. d. Both I and II are false. 1
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
CHAPTER 1 TEST BANK PRELIMINARIES SIXTH EDITION easy 6. Which of the following is a positive statement? a. The President of the United States ought to be elected by a direct vote of the American people rather than the Electoral College. b. A fundamental assumption of the economic theory of consumer behavior is that consumers always prefer having more of any good to having less of it. c. Because many adults cannot afford to go to college, tax credits for tuition should be introduced. d. All of the above. e. None of the above. easy 7. Which of the following is a normative statement? a. The taxes paid by the poor should be reduced in order to improve the income distribution in the U.S. b.
Background image of page 2
Image of page 3
This is the end of the preview. Sign up to access the rest of the document.

This note was uploaded on 08/07/2011 for the course ECON 105 taught by Professor Prof.eco during the Spring '11 term at Indian School of Business.

Page1 / 10

Ch01 - CHAPTER 1 Preliminaries MULTIPLE CHOICE Section 1.1...

This preview shows document pages 1 - 3. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online