(Test Bank) Macroeconomics in Modules

Krugman,Wells, 3

Business

Test Bank

3rd Edition

• $15.00 $50.00

---

Description

Test Bank for Macroeconomics in Modules, The downloadable file consists of 1248 pages, and the total size of the file is 8.2 MB. Purchase now only for highly discounted price.

Author(s): Krugman, Wells

---

---

Study Note Preview

Test Bank for Macroeconomics in Modules, 3e Paul Krugman , Robin Wells (All Chapters) Chapter 1 1. Scarcity in economics means: *a. we do not have sufficient resources to produce all the goods and services we want. b. the wants of people are limited. c. there must be poor people in rich countries. d. shortages exist in nearly all markets. 2. If resources are “scarce,” it means that they: *a. cannot provide enough goods or services to satisfy all human material wants and needs. b. have no opportu nity cost. c. are probably not valued by consumers. d. have an unlimited supply. 3. A key th eme fundamental to all of economics is that: a. there are limited wants. b. we are a rich country but are simply not aware of it. *c. people have unlimited wants but face limited means to satisfy them. d. there are unlimited resources. 4. The probl em of scarcity is confronted by: a. industrialized societies only. b. preindustrialized societies only. c. societies governed by communist philosophies onl y. *d. all societies. 5. When we are forced to make choices, we are facing the concept of: a. human capital . b. inflation. *c. scarcity. d. economic aggregates. 6. We are forced to make choices because of: a. exploitation. b. efficiency. *c. scarcity. d. the margin. 7. Scarcity exists when: a. making choices among two or more alt ernatives is not necessary. b. individuals can have more of any good without giving up anything. *c. individuals can have more of one good but only by giving up something else. d. resources are unlimited. 8. Scarcity in economics means: *a. we do n ot have sufficient resources to produce all of the goods and services we want. b. the wants of people are limited. c. there must be poor people in rich count ries. d. economists are clearly not doing their jobs. 9. Although fresh water is very abundan t in most places, it is scarce because: a. it has no alternative uses. *b. there is not enough of it to meet all needs. c. it is a free good. d. scarce go ods in general are not all that costly. 10. Fresh water is considered a scarce good because: *a. not enough of it is available for all needs. b. it does not have any uses. c. scarce goods are less expensive. d. not enough of it is available for all needs and because it is less expensive. 11. The problem of determining what goods and service s 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 of 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. 12. In China, which would NOT be a resource in the production of rice? a. ferti le land b. labor c. capital equipment *d. money 13. A resource is anything that: *a. can be used in production. b. for which you pay. c. is in scarce supply. d. can be consumed. 14. We have to make choices because: a. we have unlimited inco me. *b. resources are scarce. c. resources are infinite. d. with good planning, trade -offs can be avoided. 15. When a chef creates a dinner plate of food for a customer, which represents physical capital? a. the chef *b. the oven c. the food ingr edients d. the chef's training and experience I think this may be a redundant answer to “A” 16. Manny is attending college and majoring in economics. By doing so, Manny is primarily improving his: a. land. b. labor. c. capital. *d. human capital. 17. Which is not an example of a resource? a. land b. labor c. capital *d. production 18. Which can best be considered the resources used in the production of computers? a. money from investors b. wages of computer engineers *c. computer eng ineers d. taxes paid on the profits from the sale of the computers 19. Corner offices in high -rise office buildings usually cost more to rent than other offices. This best illustrates the economic principle of: a. normative economics. *b. scarce res ources. c. resources being used as efficiently as possible to achieve society's goals. d. oppor tunity costs. 20. In Ventura County, California, strawberry production is limited by the number of acres available for agriculture production. The statement that best represents this economic concept is: *a. resources are scarce. b. the cost of somet hing is what you give up to get it. c. normative economics describes how the economy should work. d. resources should be used as efficiently as possible to a chieve society's goals. 21. You like to read Vogue and Sports Illustrated. You have only $5 to spend, so you only buy Sports Illustrated. The statement that best represents this economic concept is: *a. resources are scarce. b. the real cost of someth ing is what you must give up to get it. c. positive economics explains how the economy actually works. d. economic models are used to answer “what if” questions. 22. Intel finds it difficult to hire enough skilled computer engineers. The statement that best represents this economic concept is: *a. resources are scarce. b. the real cost of some thing is what you must give up to get it. c. economists may disagree due to differences in their political views. d. economic models are simplified represent ations of reality. 23. In Colorado, there has been a drought, and rural communities are fighti ng with urban areas over water. The statement that best represents this economic concept is: *a. resources are scarce. b. resources should be used as effici ently as possible to achieve society's goals. c. the real cost of something is what you must giv e up to get it. d. economic models are used to answer “what if” questions. 24. Opportunity cost is: a. about half of the monetary cost of a product. b. the dollar payment for a product. c. the benefit derived from a product. *d. the value of the b est alternative forgone in making any choice. 25. The opportunity cost of something is: a. greater during periods of rising prices. b. equal to the money cost. c. less during periods of falling prices. *d. what is given up to acquire it. 26. Whenever a choice is made: *a. the cost of that choice could be referred to as opportunity cost. b. the cost is easy to measure in dollar terms. c. efficiency is improved. d. scarcity is not the problem. 27. You can spend $100 on either a new economic s textbook or a new CD player. If you choose to buy the new economics textbook, the opportunity cost is: a. $100. *b. your enjoyment of the new CD player. c. both the $100 and your enjoyment of the new CD player. d. impossible to determine. 28. Margo spends $10,000 on one year's college tuition. The opportunity cost of spending one year in college for Margo is: a. $10,000. b. whatever she would have p urchased with the $10,000 instead. c. whatever she would have earned had she not been in college . *d. whatever she would have purchased with the $10,000 and whatever she would have earned had she not been in college. 29. If the state government alloca tes additional spending on education, the opportunity cost is: a. zero. b. the dollar amount o f the additional spending. c. considered only if additional taxes need to be raised to fund the spending. *d. measured in terms of the best alternative use f or that money. 30. Khalil is offered a free ticket to the opera. His opportunity cost of going to the opera is: a. zero—the tickets were free. b. the price listed on the ticket. *c. whatever Khalil would have done had he not gone to the opera. d. the price listed on the ticket or whatever Khalil would have done had he not gone to the opera. 31. The cost of leaving the skating championship before it ends is ________, while the cost of staying for the entire match is ________. a. the opportunity cost of not seeing the perfect “10” performance that happens; zero —the ticket to the championship is already paid, so there is no cost *b. the opportunity cost of not seeing the perfect “10” performance that happens; the opportunity cost of what else you could have done during that time c. zero—you don't have to pay to leave; zero —the ticket to the match is already paid so there is no cost d. the cost of the ticket; the cost of the ticket 32. A new fast -food restaurant offered a free meal (valued at $ 5) a week for a year to its first 100 customers. Ramona camped out for 48 hours before the openin g to be one of the first 100 customers. The cost of the free meal a week for a year for Ramona was: a. zero. b. $260. *c. whatever she would have done with those 48 hours. d. The cost is impossible to determine. 33. The local Taco Hut charges the s ame price for everything on its menu: $3 will buy a taco, a burrito, or nachos. You buy the taco and think that if you had not purchased the taco, you would ha ve purchased the burrito. The opportunity cost of the taco is: a. the $3. *b. your enjoyment o f the burrito. c. the $3 and your enjoyment of the burrito. d. the $3, your enjoyment of the burrito, and your enjoyment of the nachos. 34. For an economi st, the cost of something is: a. the amount of money you paid for it. *b. what you gave up to get it. c. always equal to its market value. d. the quantity of resources used to produce it. 35. The best measure of the opportunity cost of any choice i s: a. the monetary cost of that choice. *b. whatever you have given up to make that choice, ev en if no monetary costs are involved. c. the cost associated with not taking full advantage of the opportunity offered by that choice. d. your hourly wage. 36. While buying refreshments for an upcoming party, you notice that a six -pack of Americana Be er costs $2 and a six -pack of Bavarian Beer costs $4. You buy the six - pack of Bavarian Beer, although you wonder if maybe two six -packs of Americana Beer would have been a better choice. The opportunity cost of the Bavarian Beer is: a. the $4. b. a six -pack of Americana Beer. *c. two six -packs of Americana Beer. d. the $4 and the six -pack of Americana Beer. 37. Your elderly grandma tells you: “I haven't been taking my beloved walks because I'm concerned about falling and getting hurt. See, there is always a cost to doing something. But if you don't do anything, then there is no cost.” Your grandma does not understand the concept of: a. scarcity in econo mics. b. efficiency in economics. *c. opportunity cost in economics. d. models in economics. 38. The cost of leaving a championship soccer match before it ends is ________, while the cost of staying for the entire match is ________. a. the opportun ity cost of not seeing the winning goal with two minutes to go; zero —the ticket to the match is a lready paid so there is no cost *b. the opportunity cost of not seeing the winning goal with two minutes to go; the opportunity cost of what else you could ha ve done during that time c. zero—you don't have to pay to leave; zero —the ticket to the match is already paid so there is no cost d. the cost of the ticket; also the cost of the ticket 39. Zoe's grandparents are excited about finally paying off their mortgage, because they say, “Our cost of housing is now zero.” Zoe should explain to them the economic principle of: a. scarcity: resources are limited. *b. opportunity cost: by living in the house, they are giving up the opportunity to sell the house, buy a smaller one, and pocket the difference. c. normative economics, which explains how the eco nomy should work. d. equity: it is unfair that some people are still paying off their mortgage. 40. The university recently inherited a large mansion from a wealthy alumnus. The university plans to use the mansion for faculty parties and to house disti nguished guests. The opportunity cost of the mansion to the university is: a. zero, because it was a gift. b. the original cost of building the mansion. *c. the amount the university would receive if it sold the mansion. d. the cost of catering the pa rties at the mansion. 41. A new startup airline is offering free round -trip tickets to anywhere to the first 600 people who enter the office on the airline' s first day of business. You arrive 24 hours before they are scheduled to open to be sure to get the free tickets, and you buy food from vendors while waiting in line. The cost of the tickets to you is: a. zero. b. just the cost of food while you wait i n line. *c. the cost of food while you wait in line and the opportunity cost of your time spent in line. d. the actual value of the ticket. 42. A friend comes up to you and offers to give you a free ticket to the local professional team's baseball gam e that night. You decide to attend the game. The game takes five hours and costs you $15 for tran sportation. If you had not attended the game, you would have worked at your part -time job for $8 an hour. What is the cost to you of attending the game? a. The cost is zero —the ticket is free. b. $65 c. $40 *d. $55 43. For a student that owns his o r her own home and doesn't plan to live in the dorm the cost of going to college is: a. tuition and the cost of housing. b. tuition, the cost of housing, an d the cost of books. *c. tuition, the cost of books, and forgone income. d. forgone income only . 44. You have $1 to spend on a vending machine snack. A bag of chips will cost you $1 and the candy bar will also cost you $1. If you choose the bag of chi ps, the opportunity cost of buying the chips is: a. $1 plus the enjoyment you would have receiv ed from the candy bar. b. $2 minus the enjoyment you received from the bag of chips. c. $1. *d. the enjoyment you would have received from the candy bar. 45. A college student is faced with a difficult decision of how to spend one hour tonight. She c ould babysit her professor's child at an hourly wage of $7, she could work at the college library at a wage of $6, or she could finish her economics homework a ssignment. If she chooses to complete her homework assignment, she has incurred an opportunity co st equal to: *a. $7. b. $6. c. $13. d. $0. 46. If you decide to go to Cancún with your friends during spring break, you realize you cannot go to Paris with your sister in the summer. The statement that best represents this economic concept is: *a. the real cost of something is what you must give up to get it. b. positive economics explains how the economy actually works. c. normative economics descri bes how the economy should work. d. there are gains from trade. 47. You decide to join the ec onomics club, but this means you can't join the accounting club because it meets at the same time. The statement that best represents this economic concept is: *a. the real cost of something is what you must give up to get it. b. economic models are use d to answer “what if” questions. c. people usually avoid opportunity costs. d. there are gains from trade. 48. The student center on campus has burritos, bagels, or burgers for lunch, and they all cost the same. You decide to have a burger today, but if they were out of burgers, you would have bought a bagel. Your opportunity cost of buying a burger is your: a. enjoyment of the burger. *b. enjoyment of t he bagel. c. enjoyment of the burrito. d. enjoyment of the bagel and burrito. 49. When the S an Francisco city manager faces a complaint that the city council chamber podium is not accessible to individuals with disabilities, he responds that the $1 mi llion improvement will not happen because “that money could be spent building 70 curb ramps.” The statement that best represents this economic concept is: a. resources are scarce. *b. the real cost of something is what you must give up to get it. c. economic models are simplified representations of reality. d. when markets don't achieve efficienc y, government intervention can improve society's welfare. 50. The student center on campus has burritos, bagels, or burgers for lunch, and they all cost the same. You love burgers and bagels, but you decide to have a burger today. If they were out of bu rgers, you would have bought a bagel. The statement that best represents this economic concept is: *a. the real cost of something is what you must give up to get it. b. physical capital is a factor of production. c. resources are used to produce someth ing else. d. normative economics describes how the economy should work. 51. Microeconomics deals with: a. the working of the entire economy or large sect ors of it. b. economic growth. *c. individual decision makers in the economy. d. gross domesti c product. 52. The study of a single firm and how it determines prices would fall under the study of: a. macroeconomics. *b. microeconomics. c. economic growth. d. fiscal policy. 53. Macroeconomics deals with: a. bits and pieces of the economy . b. the question of how a business unit should operate profitably. *c. the working of the entire economy or large sectors of it. d. how individuals make de cisions. 54. The primary emphasis in macroeconomics is on: a. how firms set prices. *b. the national economy. c. marginal analysis. d. bits and pieces of the economy. 55. Which would be studied in macroeconomics? a. the change in automobile sa les due to a change in the price of automobiles b. the impact of a tax reduction on the profits of an individual business *c. recessions d. the unemployment of workers displaced by technological change in the typesetting industry 56. The basic concer n of microeconomics is: a. to keep business firms from losing money. b. to prove that capitali sm is better than socialism. *c. to study the choices people make. d. to use unlimited resources to produce goods and services to satisfy limited wants. 57. How people choose among the alternatives available to them is: a. not part of the study of e conomics. b. impossible to describe. *c. the study of microeconomics. d. the emphasis in the study of macroeconomics. 58. In contrast to the conclusions drawn from microeconomics, many economists would argue that in macroeconomics, government: a. control of rent prices increases overall economic activity. b. intervention in markets usually leaves society as a whole worse off. c. taxation of goods and s ervices does not create a deadweight loss of economic welfare. *d. intervention in markets can p revent or reduce the effects of adverse events on the macroeconomy. 59. Which area suggests a limited role for government? *a. microeconomics b. macroeco nomics c. microeconomics and macroeconomics d. government policy 60. The widely held view th at the government should take an active role in the macroeconomy dates to: a. the Civil War. b. World War I. *c. the Great Depression. d. the Vietnam War. 61. Changing the level of government spending is an example of: *a. fiscal policy. b. interest rate policy. c. monetary policy. d. exchange rate policy. 62. The modern tools of macroeconomic policy are: a. tax policy and antitrust policy. *b. fiscal policy and monetary policy. c. monetary policy and exchange rate policy. d. capital po licy and labor policy. 63. Controlling interest rates is an example of: a. fiscal policy. b. tax policy. *c. monetary policy. d. exchange rate policy. 64. Fiscal policy refers to the: a. control of interest rates. *b. control of government sp ending and taxation. c. control of the quantity of money. d. control of interest rates and of government spending. 65. The economist whose writings in the 1930s concluded that the cause of an economic depression is inadequate spending was: a. Herber t Hoover. *b. John Maynard Keynes. c. Andrew Mellon. d. Joseph Schumpeter. 66. One role for government policy is to: a. provide insurance to cover dama ges from macroeconomic fluctuations. *b. attempt to manage short -run macroeconomic fluctuations. c. subsidize private insurance for businesses to cover harm from macroeconomic fluctuations. d. avoid Keynesian economics. 67. Among the tools available to macroeconomic policymakers is: *a. fiscal policy, for use in controlling government spending and taxation. b. antitrust policy, to break up monopolies. c. environmental policy, to clean up the economy. d. improving FDA standards for food and drugs. 68. Economic theory in 1936 changed dramatically with the publication of: *a. The General T heory of Employment, Interest and Money , by John Maynard Keynes. b. An Inquiry into the Nature and Causes of the Wealth of Nations, by Adam Smith. c. The Road to Serfdom , by F. A. Hayek. d. Principles of Economics , by Paul Samuelson. 69. The central mission of modern macroeconomics is to prevent: a. shortages. b. surpluses. c. high gas prices. *d. a deep recession like the Great Depression. 70. Which are considered to be the two types of macroeconomic policies? *a. monetary and fiscal policy b. monetary and regulation policy c. fiscal and regulation policy d. fiscal policy and price controls 71. Fiscal policy attempts to affect the level of overall spending in the economy by making changes in: a. the interest rate. b. the money suppl y. c. banking regulations. *d. taxes and spending. 72. Monetary policy attempts to affect the overall level of spending in the economy by making changes i n: a. taxes. b. taxes and spending. c. taxes and interest rates. *d. interest rates and the quantity of money. 73. Monetary policy attempts to affect the overall level of spending in the economy through: a. changes in the inflation rate. *b. changes in the quantity of money or the interest rate. c. changes in tax policy or government spend ing. d. discretionary regulation of profits and wages. 74. Fiscal policy attempts to affect the overall level of spending in the economy through: a. changes in the inflation rate. b. changes in the quantity of money or the interest rate. *c. change s in tax policy or government spending. d. discretionary regulation of profits and wages.