Micro-Economics Check your Understanding Review

Micro-Economics Check your Understanding Review - Chapter...

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Chapter One Question 1.How people choose among the alternatives available to them is: • A) a description of economics. • B) a theory of opportunity costs. • C) the study of microeconomics. • D) all of the above. Chapter One Question 2.The problem of determining what goods and services society should produce: • A) exists because we can produce more than we need or want. • B) exists because there are not enough resources to provide all the goods and services that people want to purchase. • C) would not exist if all goods and services were scarce. • D) would not exist if government owned all of the resources. Chapter One Question 3. Marginal analysis: • A) refers to decisions about whether to do a bit more or a bit less of an activity. • B) helps when making a “how much” choice. • C) involves tradeoffs. • D) involves all of the above. Chapter One Question 4. One of the four principles of individual choice is: • A) resources are scarce. • B) the real cost of something is its opportunity cost. • C) people usually take advantage of opportunities to make themselves better off. • D) all of the above.
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Chapter Two Question 5. The importance of an economic model is that it allows us to: • A) build a complex and accurate model of the economy. • B) build an accurate mathematical model of the economy. • C) focus on the effects of only one change at a time. • D) do all of the above. Chapter Two Question 6. The production possibilities curve illustrates that: • A) the economy will automatically end up at full employment. • B) an economy's productive capacity increases proportionally with its population. • C) if all resources of an economy are being used, more of one good can be produced only if less of another good is produced. • D) economic production possibilities have no limit. Chapter Two Question 7. When moving along a production possibilities curve, the opportunity cost to society of getting more of one good: • A) is constant. • B) is measured in dollar terms. • C) is measured by the amount of the other good that must be given up. • D) usually decreases. Chapter Three Question 8. A decrease in the price of eggs will result in a(n): • A) increase in the demand for eggs. • B) increase in the supply of eggs. • C) greater amount of eggs supplied. • D) greater amount of eggs demanded.
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Chapter Three Question 9. The law of demand is illustrated when: • A) an increase in tuition encourages more students to enroll in college because the quality of education has risen. • B) an increase in the purchases of personal computers results from lower prices. • C) higher oil prices causes oil companies to drill for new sources of oil. • D) higher income causes more people to adopt
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Micro-Economics Check your Understanding Review - Chapter...

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