(Test Bank) Foundations of Economics

Bade,Parkin, 9

Business

Test Bank

9th Edition

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Test Bank for Foundations of Economics, The downloadable file consists of 153 pages, and the total size of the file is 1.88 MB. Purchase now only for highly discounted price.

Author(s): Bade, Parkin

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1 Copyright © 2021 Pearson Education, Inc. Foundations of Macroeconomics, 9e (Bade) Chapter 1 Getting Started 1.1 Definition and Questions 1) Scarcity exists because A) human wants exceed the resources available to satisfy them. B) some individuals have low income. C) the costs of production are high. D) some people make bad economic decisions. E) people take too much leisure time. Answer: A Topic: Scarcity Skill: Level 1: Definition Section: Checkpoint 1.1 Status: Old AACSB: R eflective thinking 2) Scarcity A) is the inability to satisf y all our wants. B) leads to higher prices. C) applies only to people living in poverty. D) is not something that affects very rich people. E) used to exist everywhere but has been eliminated in advanced economies. Answer: A Topic: Scarcity Skill: Level 1: Definition Section: Checkpoint 1.1 Status: Old AACSB: Reflective thinking 3) Scarcity requires that we A) produce efficiently. B) learn to limit our wants. C) have the most rapid economic growth possible. D) have unlimited resources. E) make choice s about what goods and services to produce. Answer: E Topic: Scarcity Skill: Level 1: Definition Section: Checkpoint 1.1 Status: Old AACSB: Reflective thinking 2 Copyright © 2021 Pearson Education, Inc. 4) Scarcity means that A) what we can produce with our resources is greater than our mat erial wants. B) resources are unlimited. C) wants are greater than what we can produce with our resources. D) governments must make up for shortages in resources. E) ch oices made in self -interest cannot be the same as those made in the social interest. Answer: C Topic: Scarcity Skill: Level 1: Definition Section: Checkpoint 1.1 Status: Old AACSB: Reflective thinking 5) Because human wants are insatiable and unlimited while available resources are limited, people are said to face the problem of A) sca rcity. B) why to produce. C) macroeconomics. D) microeconomics. E) social interest versus self -interest. Answer: A Topic: Scarcity Skill: Level 1: Definition Section: Checkpoint 1.1 Status: Old AACSB: Reflective thinking 6) Which of the following st atements BEST describes the study of economics? Economics studies how A) to organize production so that scarcity does not o ccur. B) firms make profits. C) we make choices in the face of scarcity. D) to create incentives so that scarcity does not exist. E) businesses reach decisions. Answer: C Topic: Scarcity Skill: Level 1: Definition Section: Checkpoint 1.1 Status: Old AACSB: Reflective thinking Thank you for your order, Copy the link below in your internet browser to download your order file complete. https://mega.nz/file/r9sX3KoS#TjmKBksHSGS81b8j9N - 9bCSVmFO5pkieANkQg1GyKyg I would really appreciate it if you can leave a positive feedback. That would be really helpful for my store, and I will surely leave a positive feedback as well!! Thank you and have a wonderful day :)) Note: If there is any problem in the download link, like decryption key error, try download the file in a different browser, if you still have any problem, just send us email at stude ntshelp@hotmail.com Or you can also send us message on the customer message box in the website. 3 Copyright © 2021 Pearson Education, Inc. 7) Scarcity forces people to A) choose among available alternatives. B) cheat and steal. C) be unwillin g to help others. D) live at a low standard of living. E) consume as much as they can as quickly as they can. Answer: A Topic: Scarcity Skill: Level 2: Using definitions Section: Checkpoint 1.1 Status: Old AACSB: Reflective thinking 8) Scarcity mean s we must A) consume less. B) produce less. C) make choices . D) earn more. E) work more. Answer: C Topic: Scarcity Skill: Level 1: Definition Section: Checkpoint 1.1 Status: Old AACSB: Reflective thinking 9) What is the reason that all economic issu es and problems occur? A) All nations use some form of mone y to buy and sell goods and services. B) Humans are always wasteful and inefficient in production and consumption. C) Powerful governments are able to control production and consumption. D) Human w ants exceed the resources available to satisfy them. E) People seek only their own self -interest. Answer: D Topic: Scarcity Skill: Level 2: Using definitions Section: Checkpoint 1.1 Status: Old AACSB: Reflective thinking 4 Copyright © 2021 Pearson Education, Inc. 10) The study of econ omics is best described as a study of A) the factors that influence the stock and bond markets. B) capitalism. C) the choices made in producing goods and services. D) coping with scarcity, and choices made as a result of scarcity in a society. E) how peop le ear n a living. Answer: D Topic: Definition of economics Skill: Level 1: Definition Section: Checkpoint 1.1 Status: Old AACSB: Reflective thinking 11) Which of the following statements BEST describes the study of economics? Economics studies how A) to o rganize production so that scarcity does not occur. B) firms make profits. C) we make choices in the face of scarcity. D) to create incentives so that scarcity does not exist. E) businesses reach decisions. Answer: C Topic: Definition of economics Skill : Level 1: Definition Section: Checkpoint 1.1 Status: Old AACSB: Reflective thinking 12) Which of the following BEST defines economics? A) Economics teaches how to limit our wants. B) Economics studies how to choose the be st alternative when coping wi th scarcity. C) Economics helps you earn as much money as possible. D) Economics analyzes all aspects of human behavior in general. E) Economics is concerned with prices and quantities of goods and services, both at the individ ual level and at the industry level. Answer: B Topic: Definition of economics Skill: Level 1: Definition Section: Checkpoint 1.1 Status: Old AACSB: Reflective thinking 5 Copyright © 2021 Pearson Education, Inc. 13) Economics is the social science that studies A) the real reasons people buy g oods and services. B) the ps ychology of individuals and businesses. C) whether a nation has enough natural resources. D) how people make choices to cope with scarcity. E) how choices made in the social interest could eliminate scarcity. Answer: D Topic: Definition of economics Skill: Level 1: Definition Section: Checkpoint 1.1 Status: Old AACSB: Reflective thinking 14) Economics is best defined as the social science that studies A) how a person can get everything he or she wants. B) the reason money exists. C) the way to elimin ate choices in our decisions. D) the choices that societies, and the people and institutions that make up societies, make in dealing with the issue of scarcity . E) how choices made in the social interest must conflict with choices made in the self -interest . Answer: D Topic: Definition of economics Skill: Level 1: Definition Section: Checkpoint 1.1 Status: Old AACSB: Reflective thinking 15) Microeconomics includes the study of the A) aggregate effects on the national economy. B) recessions and inflati on in the global economy. C) choices made by individuals and businesses. D) reasons why the government changes interest rates. E) nationwide unemployment rate. Answer: C Topic: Microeconomics Skill: Level 1: Definition Section: Checkpoint 1.1 Status: Old AACSB: Reflective thinking 6 Copyright © 2021 Pearson Education, Inc. 16) The primary focus of microeconomics is A) to examine the operation of the entire (aggregate) economy. B) to examine the behavior and operation of the individual units or sectors that make up the economy. C) our governm ent's monetary policy. D) the levels of employment and inflation. E) to study ho w we managed to eliminate scarcity. Answer: B Topic: Microeconomics Skill: Level 1: Definition Section: Checkpoint 1.1 Status: Old AACSB: Reflective thinking 17) Which o f the following is a microeconomic issue? A) The price of gasoline increases in the United States this year. B) The Brazilian economy experiences rapid economic growth. C) The unemployment rate soars in Spain. D) Inflation skyrockets in Russia. E) The U.S. government cuts taxes to combat a recession. Answer: A Topic: Microeconomics Skill: Level 2: Using definitions Section: Checkpoint 1.1 Status: Old AACSB: Reflective thinking 18) Which of the following is a microeconomic issue? A) Growth in the U.S. economy slowed. B) Increased federal government expenditures have lowered the unemployment rate. C) The effect the COVID -19 pandemic has on the unemployment rate. D) The quantity of wheat grown in the United States increases this year. E) The U.S. governm ent cuts taxes to co mbat a recession. Answer: D Topic: Microeconomics Skill: Level 2: Using definitions Section: Checkpoint 1.1 Status: Revised AACSB: Reflective thinking Thank you for your order, Copy the link below in your internet browser to download your order file complete. https://mega.nz/file/r9sX3KoS#TjmKBksHSGS81b8j9N - 9bCSVmFO5pkieANkQg1GyKyg I would really appreciate it if you can leave a positive feedback. That would be really helpful for my store, and I will surely leave a positive feedback as well!! Thank you and have a wonderful day :)) Note: If there is any problem in the download link, like decryption key error, try download the file in a different browser, if you still have any problem, just send us email at stude ntshelp@hotmail.com Or you can also send us message on the customer message box in the website. 7 Copyright © 2021 Pearson Education, Inc. 19) Which of the following is a microeconomic topic? i. K-Mart's decision to close stores that are not making a profit ii. Home Depot's choice to hire more full -time employees because its sales increased iii. Delta Airlines changes its fares. A) i only B) ii only C) i and iii D) ii and iii E) i, ii, and iii Answer: E Topic: Micro economics Skill: Lev el 2: Using definitions Section: Checkpoint 1.1 Status: Old AACSB: Reflective thinking 20) Which of the following is a microeconomic topic? A) Northwes t Airlines analyzes the benefits of adding one more flight to Salt Lake City. B) Unemployment soars as taxes increase. C) The government leaves interest rates unchanged as the economy improves. D) Germany's government increases taxes to avoid a budget defi cit. E) Chinese economic growth slows. Answer: A Topic: Microeconomics Skill: Level 2: Using definitions Section: Checkpoint 1.1 Status: Old AACSB: Reflective thinking 21) Which of the following is a microeconomic topic? i. Gas prices increase after a hurricane hits the gulf coast. ii. Xavier starts a new business designing web pages. iii. Abby decides to practice an extra hour of soccer instead of studying. A) i, ii and iii B) i only C) ii and iii D) ii only E) i and ii Answer: A Topic: Microecono mics Skill: Level 2: Using definitions Section: Checkpoint 1.1 Status: Old AACSB: Reflective thinking 8 Copyright © 2021 Pearson Education, Inc. 22) Macroeconomics is the study of A) the actions of individual consumers. B) national or global economies. C) the actions of individual businesses. D) the government. E) how ceteris paribus affects causation. Answer: B Topic: Macroeconomics Skill: Level 1: Definition Section: Checkpoint 1.1 Status: Old AACSB: Reflective thinking 23) Which of the following BEST describes macroeconomics? A) It analyzes the aggregate effects on the national economy of the choices made by ind ividuals, firms, and governments. B) It studies the choices that individuals and businesses make when coping with scarcity. C) It examines how the choices that individuals affect governments. D) It is not a social science because its predictions cannot be tested. E) Proving causation is never a problem for macroeconomics. Answer: A Topic: Macroeconomics Skill: Level 1: Definition Section: Checkpoint 1.1 Status: Old AACSB: Reflective thinking 24) Which of the following is a topic studied in macroecono mics? A) the pricing decisions in the computer hardware industry B) the effect on economic growth if the government raises taxes C) how the wheat industry determines how much wheat to grow D) the impact of labor unions on wages E) the impact of higher pric es for gasoline on the number of SUVs people buy Answer: B Topic: Macroeconomics Skill: Level 2: Using definitions Section: Checkpoint 1.1 Status: Old AACSB: Reflective thinking Thank you for your order, Copy the link below in your internet browser to download your order file complete. https://mega.nz/file/r9sX3KoS#TjmKBksHSGS81b8j9N - 9bCSVmFO5pkieANkQg1GyKyg I would really appreciate it if you can leave a positive feedback. That would be really helpful for my store, and I will surely leave a positive feedback as well!! Thank you and have a wonderful day :)) Note: If there is any problem in the download link, like decryption key error, try download the file in a different browser, if you still have any problem, just send us email at stude ntshelp@hotmail.com Or you can also send us message on the customer message box in the website. 9 Copyright © 2021 Pearson Education, Inc. 25) Which of the following is a macroeconomic topic? A) the federal go vernment's decision to spend more on environmental protection B) the county government's decision to increase the sales tax for your county C) Why did production and jobs expand rapidly in 2017? D) General Motors decides what prices to set for their new mo dels. E) the effect of floods in agricultural areas on the price and quantity of wheat Answer: C Topic: Macroeconomics Skill: Level 2: Using definitions Section: Checkpoint 1.1 Status: Revised AACSB: Reflective thinking 26) Which of the following is a macroeconomic issue? A) The price of a ticket to Walt Disney World in Orlando is increased. B) The National Football League signs a new television contract. C) The number of jobs and production in Zimbabwe increase. D) The Iowa corn harvest is smaller t han normal. E) Utilities are required to install more anti -pollution devices. Answer: C Topic: Macroeconomics Skill: Level 2: Using definitions Section: Checkpoint 1.1 Status: Old AACSB: Reflective thinking 27) Which of the following is a macroecono mic topic? i. China increases interest rates to slow its economic growth. ii. Congress lowers tax rates to try to lower the unemployment rate. iii. Nissan decides to produce more electric Leaf models and fewer Altima sedans. A) i a nd ii B) i, ii and iii C) iii only D) i and iii E) ii and iii Answer: A Topic: Macroeconomics Skill: Level 2: Using definitions Section: Checkpoint 1.1 Status: Old AACSB: Reflective thinking 10 Copyright © 2021 Pearson Education, Inc. 28) When you make the decision to spend your time attending class, which economic question are you answering? A) What? B) How? C) For whom? D) Why? E) Is this in the social interest? Answer: A Topic: Economic questions, what Skill: Level 2: Using definition s Section: Checkpoint 1.1 Status: Old AACSB: Reflective thinking 29) Of th e three major economic questions, which of the following is the BEST example of a "What?" question? A) Should automobiles be produced using workers or robots? B) Should higher -income or lower -income people buy SUVs? C) Should we make faster microprocessors or pest -resistant corn? D) Should migrant workers or domestic workers be used to pick grapes? E) What should doctors be paid? Answer: C Topic: Economic questions, what Skill: Level 2: Using definitions Section: Checkpoint 1.1 Status: Old AACSB: Refl ective thinking 30) When Ford decides to increase production of hybrid cars, it directly answers the ________ question. A) what B) how C) for whom D) where E) why Answer: A Topic: Economic questions, what Skill: Level 2: Using definitions Section: Che ckpoint 1.1 Status: Old AACSB: Reflective thinking 11 Copyright © 2021 Pearson Education, Inc. 31) When Delta decides to quit flying to Lithuania, it directly answers the ________ question. A) what B) why C) for whom D) how E) when Answer: A Topic: Economic questions, what Skill: Level 2: Usi ng definitions Section : Checkpoint 1.1 Status: Old AACSB: Reflective thinking 32) The question of "What goods and services get produced?" most closely relates to which of the following issues? A) the distribution of goods and services in the economy B) producing goods and services in the least costly manner C) building a missile defense system, or putting a computer in every elementary school classroom D) obtaining specialized training to increase one's income E) taxing high income workers to give payme nts to poor households Answer: C Topic: Economic questions, what Skill: Level 3: Using models Section: Checkpoint 1.1 Status: Old AACSB: Reflective thinking 33) When a home builder decides to computerize all of its production schedules, it directly answers the ________ question. A) for whom B) what C) where D) how E) why Answer: D Topic: Economic questions, how Skill: Level 2: Using definitions Section: Checkp oint 1.1 Status: Old AACSB: Reflective thinking 12 Copyright © 2021 Pearson Education, Inc. 34) When Fresh Express Salads decide s to mechanically pick all of its lettuce, it directly answers the ________ question. A) what B) how C) for whom D) where E) when Answer: B Topic: Economic questions, how Skill: Level 2: Using definitions Section: Checkpoint 1.1 Status: Old AACSB: Re flective thinking 35) When the power company decides to use manpower to bury its lines, it directly answers the ________ question. A) what B) for wh om C) how D) why E) when Answer: C Topic: Economic questions, how Skill: Level 2: Using definitions Section: Checkpoint 1.1 Status: Old AACSB: Reflective thinking 36) The question of "How are goods and services produced?" most closely addresses whic h of the following issues? A) Should Ford build SUVs or luxury cars? B) Should Ford use expensive industria l robots or inexpensive Mexican autoworkers to produce SUVs? C) Should contractors build residential housing or shopping malls? D) Is income distribu ted fairly in the United States? E) Why are Christmas trees popular only in December? Answer: B Topic: Ec onomic questions, how Skill: Level 2: Using definitions Section: Checkpoint 1.1 Status: Old AACSB: Reflective thinking Thank you for your order, Copy the link below in your internet browser to download your order file complete. https://mega.nz/file/r9sX3KoS#TjmKBksHSGS81b8j9N - 9bCSVmFO5pkieANkQg1GyKyg I would really appreciate it if you can leave a positive feedback. That would be really helpful for my store, and I will surely leave a positive feedback as well!! Thank you and have a wonderful day :)) Note: If there is any problem in the download link, like decryption key error, try download the file in a different browser, if you still have any problem, just send us email at stude ntshelp@hotmail.com Or you can also send us message on the customer message box in the website. 13 Copyright © 2021 Pearson Education, Inc. 37) Of the three major economic questions, which of the following is the BEST example of a "How?" question? A) Should we produce mo re heavy fleece coats? B) Should we collect tolls on turnpikes using human toll collectors or mechanized toll machines? C) Should we bui ld log homes or build factories from bricks? D) Should we spend more on health care? E) Should we eat more oatmeal? Answ er: B Topic: Economic questions, how Skill: Level 2: Using definitions Section: Checkpoint 1.1 Status: Old AACSB: Reflective think ing 38) Which economic question depends on the incomes that people earn and the prices they pay for goods and services? A) What? B) How? C) For whom? D) Why? E) Where? Answer: C Topic: Economic questions, for whom Skill: Level 1: Definition Section: Checkpoint 1.1 Status: Old AACSB: Reflective thinking 39) When the federal government decides to pay senators more tha n it pays soldiers, it answers the ________ question. A) why B) how C) for whom D) what E) where Answer: C Topic: Economic questions, for whom Skill: Level 2: Using definitions Section: Checkpoint 1.1 Status: Old AACSB: Reflective thinking 14 Copyright © 2021 Pearson Education, Inc. 40) When a third string NFL quarterback earns more than a police officer, society answers the ________ question. A) for whom B) what C) how D) why E) social interest vs. self -interest Answer: A Topic: Economic questions, for whom Skill: Level 2: Using definitio ns Section: Checkpoint 1.1 Status: Old AACSB: Reflective thinking 41) When unskilled teens earn less than college graduates, society answers the ________ question. A) how B) what C) for whom D) why E) social interest versus self -interest Answer: C Topic: Economic questions, for whom Skill: Level 2: Using definitions Secti on: Checkpoint 1.1 Status: Old AACSB: Reflective thinking 42) Canada has nationalized health care, so that everyone, regardless of their ability to pay, has some access to health care. Based on this observation, Canada has decided that "everyone, regar dless of their ability to pay" is the answer to what microeconomic question? A) What type of health care will be produced and in what quantity? B) How will health care be produced? C) For whom will health care be produced? D) Why will we offer health care? E) Must we offer health care? Answer: C Topic: Economic questions, for whom Skill: Level 3: Using models Section: Checkpoint 1.1 Status: Old AACSB: Analytic skills 15 Copyright © 2021 Pearson Education, Inc. 43) Choic es that are best for the individuals that make them are choices in pursuit of A) the social interest. B) efficiency. C) incentives. D) self -interest. E) equity. Answer: D Topic: Self -interest Skill: Level 1: Definition Section: Checkpoint 1.1 Status: Old AACSB: Reflective thinking 44) Self -interest A) reflects choices that are best for society as a whole. B) reflects choices that are best for the individual who makes them. C) has nothing to do with determining what goods are produced. D) occur s onl y when wants exceed available resources. E) cannot be used to determine how goods are produced. Answer: B Topic: Self -interest Skill: Level 1: Definition Section: Checkpoint 1.1 Status: Old AACSB: Reflective thinking 45) Choices that are best f or the society as a whole are choices in pursuit of A) answering the "how" question. B) the social interest. C) self -interest. D) incentives. E) answering the "for whom" question. Answer: B Topic: Social interest Skill: Level 1: Definition Section: Checkpo int 1.1 Status: Old AACSB: Reflective thinking 16 Copyright © 2021 Pearson Education, Inc. 46) The characteristic from which all economic problems arise is A) political decisions. B) providing a minimal standard of living for every person. C) how to make a profit. D) hunger. E) scarcity. Answer: E Topic: Scarcity Skill: Level 2: Using definitions Section: Checkpoint 1.1 Status: Old AACSB: Reflective thinking 47) All economic questions and problems arise from A) the fact that society has more than it needs. B) turmoil in the stock market. C) the unequal distribution of income. D) a society's wants exceeding what its scarce resources can produce. E) the difference between self -interest and social interest. Answer: D Topic: Scarcity Skill: Level 1: Definition Section: Checkpoint 1.1 Statu s: Old AACSB: Reflective thinking 48) Scarcity results from the fact that A) people's wants exceed the resources available to satisfy them. B) not all goals are desirable. C) we cannot answer the major economic questions. D) choices made in self -interes t are not always in the social interest. E) the population keeps growing. Answer: A Topic: Scarcity Skill: Level 1: Definition Section: Checkpoint 1.1 Status: Old AACSB: Reflective thinking 17 Copyright © 2021 Pearson Education, Inc. 49) To economists, scarcity means that A) limited wants ca nnot be satisfied by the unlimited resources. B) a person looking for work is not able to find work. C) the number of people without jobs rises when economic times are bad. D) there can never be answers to the what , how or for whom quest ions. E) unlimited wants cannot be satisfied by the limited resources. Answer: E Topic: Scarcity Skill: Level 1: Definition Section: Checkpoint 1.1 Status: Old AACSB: Reflective thinking 50) Which of the following statements is TRUE regarding scarcity? A) Scarcity aff ects poorer countries only. B) An economy experiences scarcity only when the incomes of its citizens decline. C) Poor people experience scarcity more often than do rich people. D) All citizens in a wealthy economy experience scarcity. E) Scarcity could be overcome if people would make all choices in the social interest. Answer: D Topic: Scarcity Skill: Level 2: Using definitions Section: Checkpoint 1.1 Status: Old AACSB: Refl ective thinking 51) People must make choices because A) most people enjoy sh opping. B) of scarcity. C) there are many goods available. D) the question "What goods and services are produced?" is not adequately answered. E) making choices is in the social i nterest. Answer: B Topic: Scarcity Skill: Level 2: Using definitions Secti on: Checkpoint 1.1 Status: Old AACSB: Reflective thinking 18 Copyright © 2021 Pearson Education, Inc. 52) Which of the following is a microeconomic issue? A) Why has unemployment risen nationwide? B) Why has economic growth been rapid in China? C) What is the impact on the quantity of Pepsi pur chased if consumers' tastes change in favor of non-carbonated drinks? D) Why is the average income lower in Africa than in Latin America? E) Why did overall production increase within the United States last year? Answer: C Topic: Microeconomics Skill: L evel 1: Definition Section: Checkpoint 1.1 Status: Old AACSB: Reflective thinking 53) Microeconomics includes the s tudy of A) how countries decide to fund their budget deficits. B) the choices that individuals and businesses make. C) how a nation promo tes economic growth. D) the effect on the national economy of the choices that individuals make. E) the overall amount of production within the economy. Answer: B Topic: Microeconomics Skill: Level 1: Definition Section: Checkpoint 1.1 Status: Old AAC SB: Reflective thinking 54) The question "Should we produce LCD televisions or computer monitors?" is an example of a ________ question. A) what B) how C) for whom D) where E) why Answer: A Topic: Economic questions, what Skill: Level 2: Using definit ions Section: Checkpoint 1.1 Status: Old AACSB: Reflective thinking 19 Copyright © 2021 Pearson Education, Inc. 55) When Fer rari decides to produce 1,200 360 Modenas each year, Ferrari is answering the ________ question. A) for whom B) how C) what D) why E) scarcity Answer: C Topic: Economic questions, what Skill: Level 2: Using definitions Section: Checkpoint 1.1 Status: Old AACSB: Reflective thinking 56) Whether a company produces fishing rods mostly by hand or using high -tech machinery is a question of A) "For whom will goods be produc ed?" B) "When will the goods be produced?" C) "Where will the goods be produced?" D) "How will the goods be produced?" E) "Why will the goods be produced?" Answer: D Topic: Economic questions, how Skill: Level 2: Using definitions Section: Checkpoint 1 .1 Status: Old AACSB: Reflective thinking 57) When a landscaping company decide s to use drafting software and computers instead of hiring designers to draw design plans by hand, it is answering the ________ question. A) how B) what C) for whom D) opport unity cost E) why Answer: A Topic: Economic questions, how Skill: Level 2: Usin g definitions Section: Checkpoint 1.1 Status: Old AACSB: Reflective thinking 20 Copyright © 2021 Pearson Education, Inc. 58) The question "Should we produce houses using bricks or wood?" is an example of a _______ _ question. A) what B) how C) for whom D) where E) why Answer: B Topic: Economic questions, how Skill: Level 2: Using definitions Section: Checkpoint 1.1 Status: Old AACSB: Reflective thinking 59) The question "Should economics majors or sociology m ajors earn more after they graduate?" is an example of a ________ question . A) what B) how C) for whom D) where E) why Answer: C Topic: Economic questions, for whom Skill: Level 2: Using definitions Section: Checkpoint 1.1 Status: Old AACSB: Reflecti ve thinking 60) If a decision is made and it is the best choice for socie ty, the decision is said to be A) a valid economic choice. B) made in self -interest. C) made in social interest. D) consistent with scarcity. E) a want -maximizing choice. Answer: C Topic: Social interest Skill: Level 2: Using definitions Section: Check point 1.1 Status: Old AACSB: Reflective thinking 21 Copyright © 2021 Pearson Education, Inc. 1.2 The Economic Way of Thinking 1) In economics, cost is measured as ________, and benefit is measured as ________. A) what y ou must give up to get something; what you are willing to give up to get it B) what you are willing to give up to get it; what you must give up to get something C) the amount of money that you pay for something; the amount of money that someone else is willing to pay you D) what you are willing to pay on the margin; what the government pays you when you are unemployed or retired E) the amount of money that you pay on the margin; the amount of money that you receive on the margin Answer: A Topic: Be nefits and costs Skill: Level 1: Definition Section: Checkpoint 1.2 Status: Old AACSB: Reflective thinking 2) An opportunity cost is A) the dollar amount that is paid. B) anything the decision maker believes costs to be. C) the benefits of the highest -value d alternative forgone. D) whatever is paid out and cannot be reduced or reversed. E) another term for all the sunk costs. Answer: C Topic: Opportunity cost Skill: Level 1: Definition Section: Checkpoint 1.2 Status: Old AACSB: Reflective thinking 3) Economists measure opportunity cost A) only when it is on the margin. B) as the best thing given up. C) as the sum of all forgone opportunities. D) as the same as marginal benefit. E) as equal to the sum of all the sunk costs. Answe r: B Topic: Opportunit y cost Skill: Level 1: Definition Section: Checkpoint 1.2 Status: Old AACSB: Reflective thinking