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Test Bank for Principles of Microeconomics 8th Edition by Mankiw

a. market.

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b. b. consumer. consumer. c. producer. d. economy.

ANSWER: ANSWER: d DIFFICULTY: Easy LEARNING OBJE ECON.MANK.012 ECON.MANK.012--Apply Applybasic, basic,economic economicprinciples principlesofofindividual individualdecision decisio CTIVES: determine determine how how an an economy economy generally generally works. works. TOPICS: Economic thinking KEYWORDS: BLOOM'S: BLOOM'S: Knowledge Knowledge CUSTOM ID:

001.01.0 001.01.0 -- MC MC -- MANK08 MANK08

2. The word “economy”comes “economy” comes from the Greek word oikonomos , which means a. “environment.” b. “production.” c. “onewho “one who manages a household.” d. “onewho “one who makes decisions.”

ANSWER: ANSWER: c DIFFICULTY: Easy LEARNING OBJE ECON.MANK.012 ECON.MANK.012--Apply Applybasic, basic,economic economicprinciples principlesofofindividual individualdecision decisio CTIVES: determine determine how how an an economy economy generally generally works. works. TOPICS: KEYWORDS: CUSTOM ID:

Economic thinking BLOOM'S: BLOOM'S: Knowledge Knowledge 002.01.0 002.01.0 -- MC MC -- MANK08 MANK08

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3. Resources are a. scarce scarcefor forhouseholds householdsbut butplentiful plentifulfor foreconomies. economies. b. b. plentiful for households but scarce scarce for economies. economies. c. c. scarce scarce for for households households and and scarce scarce for for economies. economies. d. plentiful for households households and and plentiful plentiful for for economies. economies.

ANSWER: ANSWER: c DIFFICULTY: Easy LEARNING OBJE ECON.MANK.012 ECON.MANK.012--Apply Applybasic, basic,economic economicprinciples principlesofofindividual individualdecision decisio CTIVES: determine determine how how an an economy economy generally generally works. works. TOPICS: Economic thinking Scarcity KEYWORDS: CUSTOM ID:

BLOOM'S: BLOOM'S: Comprehension Comprehension 003.01.0 003.01.0 -- MC MC -- MANK08 MANK08

4.4.In Inconsidering consideringhow howtotoallocate allocateits itsscarce scarceresources resourcesamong amongits itsvarious variousmembers, members,aahousehold householdconsider conside a. each member’sabilities. member’s abilities. b. b. each member’sefforts. member’s efforts. c. each member’sdesires. member’s desires. d. All of the above are correct.

ANSWER: ANSWER: d DIFFICULTY: Easy LEARNING OBJE ECON.MANK.012 ECON.MANK.012--Apply Applybasic, basic,economic economicprinciples principlesofofindividual individualdecision decisio CTIVES: determine determine how how an an economy economy generally generally works. works. TOPICS: Economic thinking Scarcity KEYWORDS: BLOOM'S: BLOOM'S: Comprehension Comprehension CUSTOM ID: 004.01.0 004.01.0 -- MC MC -- MANK08 MANK08 5. Fundamentally, economics deals with a. scarcity. b. b. money. money. c. poverty. d. banking.

ANSWER: ANSWER: DIFFICULTY:

a Easy

LEARNING OBJE ECON.MANK.012 ECON.MANK.012--Apply Applybasic, basic,economic economicprinciples principlesofofindividual individualdecision decisio CTIVES: determine determine how how an an economy economy generally generally works. works. TOPICS: Economic thinking Scarcity

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6. Which of the following is correct? a. The word economy comes from the Greek word for “rational thinker.” b. Economists Economists study study the the management management of of scarce scarce resources. resources. c.c.Because Becauseeconomists economistsbelieve believethat thatpeople peoplepursue pursuetheir theirbest bestinterests, interests,they theyare arenot notinterested interestedininhow how interact. d. All of the above are correct.

ANSWER: ANSWER:

b

DIFFICULTY: Easy LEARNING LEARNING OBJECTIVES: OBJECTIVES: ECON.MANK.024 ECON.MANK.024--Classify Classifythe thedifferent differentfunctions functionsan aneconomist economist TOPICS: Economic thinking Scarcity KEYWORDS: CUSTOM ID:

BLOOM'S: BLOOM'S: Knowledge Knowledge 006.01.0 006.01.0 -- MC MC -- MANK08 MANK08

7. 7.The Theoverriding overridingreason reasonwhy whyhouseholds householdsand andsocieties societiesface facemany manydecisions decisionsisisthat that a. resources are scarce. b. b. goods and and service s are not scarce. c. c. incomes incomes fluctuate fluctuate with with business business cycles. cycles. d. people, by nature, tend to disagree. disagree.

ANSWER: ANSWER: a DIFFICULTY: Moderate LEARNING OBJE ECON.MANK.012 ECON.MANK.012--Apply Applybasic, basic,economic economicprinciples principlesofofindividual individualdecision decisio CTIVES: determine determine how how an an economy economy generally generally works. works. TOPICS: Economic thinking Scarcity KEYWORDS: BLOOM'S: BLOOM'S: Comprehension Comprehension CUSTOM ID: 007.01.0 007.01.0 -- MC MC -- MANK08 MANK08 8. A society allocates its scarce to various various uses. uses. These These scarce scarce resources resources include include scarce resources resourcesto a. land. b. b. people. c. machines. d. All of the above are correct.

ANSWER: ANSWER: d DIFFICULTY: Moderate LEARNING OBJE ECON.MANK.012 ECON.MANK.012--Apply Applybasic, basic,economic economicprinciples principlesofofindividual individualdecision decisio CTIVES: determine determine how how an an economy economy generally generally works. works.

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9. The phenomenon ofscarcity of scarcitystems stems from the fact that a. most economies’ production production methods methods are are not not very very good. good. b. in mos mostt economies, econom ies, wealthy people consume consume disproportionate disproportionate quantities quantities of goods and services c. governments governments restrict restrict production production of of too too many goods and services. d. resources are limited.

ANSWER: ANSWER: d DIFFICULTY: Moderate LEARNING OBJE ECON.MANK.012 ECON.MANK.012--Apply Applybasic, basic,economic economicprinciples principlesofofindividual individualdecision decisio CTIVES: determine determine how how an an economy economy generally generally works. works. TOPICS: Economic thinking Scarcity KEYWORDS: CUSTOM ID:

BLOOM'S: BLOOM'S: Comprehension Comprehension 009.01.0 009.01.0 -- MC MC -- MANK08 MANK08

10. 10. Approximately Approximatelywhat whatpercentage percentageof ofthe theworld's world'seconomies economiesexperience experience scarcity? scarcity? a. 10% b. 40% c. 85% d. 100%

ANSWER: ANSWER: d DIFFICULTY: Easy LEARNING OBJE ECON.MANK.012 ECON.MANK.012--Apply Applybasic, basic,economic economicprinciples principlesofofindividual individualdecision decisio CTIVES: determine determine how how an an economy economy generally generally works. works. TOPICS: Economic thinking Scarcity KEYWORDS: BLOOM'S: BLOOM'S: Comprehension Comprehension CUSTOM ID: 010.01.0 010.01.0 -- MC MC -- MANK08 MANK08 11. 11.When Whenaasociety societycannot cannotproduce produceall allthe thegoods goodsand andservices servicespeople peoplewish wishtotohave, have,the theeconomy economyisisexpe exp a. scarcity. b. b. surpluses. surpluses . c. inefficiencies. inefficiencies. d. inequalities. inequalities.

ANSWER: ANSWER: DIFFICULTY:

a Moderate

LEARNING OBJE ECON.MANK.012 ECON.MANK.012--Apply Applybasic, basic,economic economicprinciples principlesofofindividual individualdecision decisio CTIVES: determine determine how how an an economy economy generally generally works. works. TOPICS: Economic thinking Scarcity

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12. 12. Which Which of of the thefollowing following products products would would be be considered considered scarce? scarce? a. bread b. b. baseballs baseballs autographed autographed by B abe Ruth c. motorcycles d. All of the above are correct.

ANSWER: ANSWER: d DIFFICULTY: Moderate LEARNING OBJE ECON.MANK.012 ECON.MANK.012--Apply Applybasic, basic,economic economicprinciples principlesofofindividual individualdecision decisio CTIVES: determine determine how how an an economy economy generally generally works. works. TOPICS: Economic thinking Scarcity KEYWORDS: CUSTOM ID:

BLOOM'S: BLOOM'S: Comprehension Comprehension 012.01.0 012.01.0 -- MC MC -- MANK08 MANK08

13. 13. In In the the broadest broadest sense, sense, economics economics is is the the study study of of a. production methods. methods. b. b. how society society manages manages its scarce scarce resources. resources. c. c. how how households households decide decide who who performs performs which which tasks. tasks. d. d. the the interaction interaction of of business business and and government. government.

ANSWER: ANSWER: b DIFFICULTY: Easy LEARNING OBJE ECON.MANK.012 ECON.MANK.012--Apply Applybasic, basic,economic economicprinciples principlesofofindividual individualdecision decisio CTIVES: determine determine how how an an economy economy generally generally works. works. TOPICS: Economic thinking Scarcity KEYWORDS: BLOOM'S: BLOOM'S: Knowledge Knowledge CUSTOM ID: 013.01.0 013.01.0 -- MC MC -- MANK08 MANK08 14. 14.The Thestudy studyof ofhow howsociety societymanages managesits itsscarce scarceresources resourcesisismost mostclosely closelyassociated associatedwith withwhich whichfield fieldo a. environmental studies b. b. economics economics c. management d. accounting

ANSWER: ANSWER: DIFFICULTY:

b Easy

LEARNING OBJE ECON.MANK.012 ECON.MANK.012--Apply Applybasic, basic,economic economicprinciples principlesofofindividual individualdecision decisio CTIVES: determine determine how how an an economy economy generally generally works. works. TOPICS: Economic thinking Scarcity

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15. 15. In In most most societies, societies, resources resources are are allocated allocated by by a. a single central planner. b. a sm small all number of of central p lanners. c. those thosefirms firmsthat that use useresources resources to toprovide provide goods goods and services. d. d. the the combined combined actions actions of of millions millions of of households households and and firms. firms.

ANSWER: ANSWER: d DIFFICULTY: Easy LEARNING OBJE ECON.MANK.012 ECON.MANK.012--Apply Applybasic, basic,economic economicprinciples principlesofofindividual individualdecision decisio CTIVES: determine determine how how an an economy economy generally generally works. works. TOPICS: Economic thinking Economic systems KEYWORDS: CUSTOM ID:

BLOOM'S: BLOOM'S: Comprehension Comprehension 015.01.0 015.01.0 -- MC MC -- MANK08 MANK08

16. 16.Coal Coalisisconsidered consideredto tobe beaanon-renewable non-renewableenergy energysource. source.Which Whichof ofthe thefollowing followingstatements statementsisiscorre corr a. Coal is an unlimited resource. b. Coal iiss a scarc e resource. resource. c. Coal is a non-scarce resource. d. Coal is not a resource.

ANSWER: ANSWER: b DIFFICULTY: Easy LEARNING OBJE ECON.MANK.012 ECON.MANK.012--Apply Applybasic, basic,economic economicprinciples principlesofofindividual individualdecision decisio CTIVES: determine determine how how an an economy economy generally generally works. works. TOPICS: Economic thinking Scarcity KEYWORDS: BLOOM'S: BLOOM'S: Application Application CUSTOM ID: 016.01.0 016.01.0 -- MC MC -- MANK08 MANK08 17. Which of the following is notan example of scarcity? a. a. Only Only some some people people can can afford afford to to buy buy aa BMW BMW automobile. automobile. b. b. Every individual in society cannot attain attain the highest highest standard standard of living to which he he or she migh migh c. c. Miranda Miranda has has more more oranges oranges in in her her orchard orchard than than she she will will ever ever use. use. d. d. Each Each member member of of aa household household cannot cannot get get everything everything he he or or she she wants. wants.

ANSWER: ANSWER: DIFFICULTY:

c Easy

LEARNING OBJE ECON.MANK.012 ECON.MANK.012--Apply Applybasic, basic,economic economicprinciples principlesofofindividual individualdecision decisio CTIVES: determine determine how how an an economy economy generally generally works. works. TOPICS: Economic thinking Scarcity

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18. 18. Economics Economics is is the the study study of of how how society society manages manages its its a. a. limited limited wants wants and and unlimited unlimited resources. resources. b. b. unlimited unlimited wants and and unlimited unlimited resources. resources. c. limited limited wants wants and and limited limited resources. resources. d. d. unlimited unlimited wants wants and and limited limited resources. resources.

ANSWER: ANSWER: d DIFFICULTY: Easy LEARNING OBJE ECON.MANK.012 ECON.MANK.012--Apply Applybasic, basic,economic economicprinciples principlesofofindividual individualdecision decisio CTIVES: determine determine how how an an economy economy generally generally works. works. TOPICS: Economic thinking Scarcity KEYWORDS: CUSTOM ID:

BLOOM'S: BLOOM'S: Knowledge Knowledge 018.01.0 018.01.0 -- MC MC -- MANK08 MANK08

19. 19. Which Which of of the the following following is is aa decision decision that that economists economists study? study? a. how much people work b. b. what people people buy c. how much money people save d. All of the above are correct.

ANSWER: ANSWER: d DIFFICULTY: Easy LEARNING LEARNING OBJECTIVES: OBJECTIVES: ECON.MANK.024 ECON.MANK.024--Classify Classifythe thedifferent differentfunctions functionsan aneconomist economist TOPICS: KEYWORDS: CUSTOM ID:

Economic thinking BLOOM'S: BLOOM'S: Comprehension Comprehension 019.01.0 019.01.0 -- MC MC -- MANK08 MANK08

20. 20. Which Which of of the the following following is is an an example example of of something something economists economists study? study? a. a. Mitch Mitch chooses chooses to to work work overtime overtime to to earn earn extra extra income income for for his his family. family. b. b. Megan sells her her physics textbook textbook from last semester semester to her her roommate for half the price of a ne c.c.The Theunemployment unemploymentrate ratein inthe theUnited UnitedStates Stateshas hasfallen fallenby bytwo twopercentage percentagepoints pointsin inthe thelast lastfew few d. All of the above are correct.

ANSWER: ANSWER: DIFFICULTY:

d Moderate

LEARNING LEARNING OBJECTIVES: OBJECTIVES: TOPICS: KEYWORDS: CUSTOM ID:

ECON.MANK.024 ECON.MANK.024--Classify Classifythe thedifferent differentfunctions functionsan aneconomist economist Economic thinking BLOOM'S: BLOOM'S: Comprehension Comprehension 020.01.0 020.01.0 -- MC MC -- MANK08 MANK08

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21. 21.What Whatterm termrefers referstotothe theidea ideathat thatsociety societyhas haslimited limitedresources resourcesand andtherefore thereforecannot cannotproduce produceall allthe theg people people wis h to have? have? a. inefficiency b. b. inequality inequality c. scarcity d. market failure

ANSWER: ANSWER:

c

DIFFICULTY: Easy LEARNING OBJE ECON.MANK.012 ECON.MANK.012--Apply Applybasic, basic,economic economicprinciples principlesofofindividual individualdecision decisio CTIVES: determine determine how how an an economy economy generally generally works. works. TOPICS: Economic thinking Scarcity KEYWORDS: BLOOM'S: BLOOM'S: Knowledge Knowledge CUSTOM ID: 021.01.0 021.01.0 -- MC MC -- MANK08 MANK08 22. 22. Which Which of of the the following following is is aa subject subject that that economists economists study? study? a. the growth in average income b. b. the fraction fraction of the population population that cannot cannot find work c. the rate at which prices are rising d. All of the above are correct.

ANSWER: ANSWER:

d

DIFFICULTY: LEARNING LEARNING OBJECTIVES: OBJECTIVES: TOPICS: KEYWORDS: CUSTOM ID:

Easy ECON.MANK.024 ECON.MANK.024--Classify Classifythe thedifferent differentfunctions functionsan aneconomist economist Economic thinking BLOOM'S: BLOOM'S: Comprehension Comprehension 022.01.0 022.01.0 -- MC MC -- MANK08 MANK08

23. 23.AAvariety varietyofoffuels fuelscan canbe beused usedtotogenerate generateelectricity. electricity.Considering Consideringonly onlythe theavailability availabilityofofthe thefuel fuelan a converting convertingitit into intoelectricity, electricity, which whichof ofthe thefollowing followingfuels fuelsisismost most scarce? scarce? a. wind power b. b. solar energy energy c. fossil fuel d. hydro-power

ANSWER: ANSWER: DIFFICULTY:

c Easy

LEARNING OBJE ECON.MANK.012 ECON.MANK.012--Apply Applybasic, basic,economic economicprinciples principlesofofindividual individualdecision decisio CTIVES: determine determine how how an an economy economy generally generally works. works. TOPICS: Scarcity KEYWORDS: BLOOM'S: BLOOM'S: Application Application

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24. 24. Which Which of of the the following following is is not not subject subject to to scarcity? scarcity? a. water b. b. steel c. diamonds d. none of the above

ANSWER: ANSWER: d DIFFICULTY: Moderate LEARNING OBJE ECON.MANK.012 ECON.MANK.012--Apply Applybasic, basic,economic economicprinciples principlesofofindividual individualdecision decisio CTIVES: determine determine how how an an economy economy generally generally works. works. TOPICS: Scarcity KEYWORDS: BLOOM'S: BLOOM'S: Application Application...