,TESTBANK FOR Exploring Microeconomics , 6th
Edition Robert L. Sexton
Notes
1- The file is chapter after chapter.
2- We have shown you few pages sample.
3- The file contains all Appendix and Excel sheet
if it exists.
4- We have all what you need, we make update
at every time. There are many new editions
waiting you.
5- If you think you purchased the wrong file You
can contact us at every time, we can replace it
with true one.
Our email:
,Name: Class: Date:
Chapter 1 - The Role and Method of Economics
1. What is economics most concerned with?
a. keeping interest rates low
b. making money in the stock market
c. allocating scarce resources to satisfy unlimited wants
d. governments’ efficient spending of tax revenues
ANSWER: c
2. What is the central concern of economics?
a. regulating the stock market
b. promoting greed and profit-making behaviour at all costs
c. finding more resources to satisfy everyone's wants
d. making the best use of scarce resources to satisfy our unlimited wants
ANSWER: d
3. Why is there scarcity?
a. because marginal costs tend to exceed marginal benefits
b. because human wants and needs are limited
c. because Canada has too many people living in poverty
d. because our unlimited wants exceed our limited resources
ANSWER: d
4. Why does the problem of scarcity exist?
a. because resources are limited, relative to wants
b. because governments fail to intervene in the marketplace
c. because resources are unlimited, relative to wants
d. because the world has many people living in poverty
ANSWER: a
5. What does scarcity result from?
a. government policies
b. people not understanding economics
c. wants that exceed the resources necessary to provide them
d. a decrease in hard workers
ANSWER: c
6. What causes scarcity?
a. the allocation of goods by prices b. specialization and division of labour
c. unlimited wants and limited resources d. the market mechanism
ANSWER: c
7. What does economics primarily explore?
a. how the government allocates its budget among competing political interests
b. how stock and bond prices fluctuate in response to changes in demand or supply
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,Name: Class: Date:
Chapter 1 - The Role and Method of Economics
c. how goods and services are produced and distributed in a world with limited resources
d. how businesses market products under competitive conditions
ANSWER: c
8. What does economics primarily study?
a. how firms compete for profits in the marketplace
b. how limited resources are allocated to satisfy unlimited wants
c. how we deal with unemployed resources
d. how prices are set in the marketplace
ANSWER: b
9. What do economists mean when they state that a good is scarce?
a. People will want to buy more of the good regardless of price.
b. It is impossible to expand the availability of the good.
c. Our wants exceed our limited resources.
d. There is a shortage of goods at the going price.
ANSWER: c
10. Which of the following statements about scarcity is the most accurate?
a. It occurs only in centrally planned economies.
b. It will likely be eliminated by technological progress.
c. It occurs when there are insufficient resources to provide for human wants.
d. It exists only in poor nations.
ANSWER: c
11. According to most economists, what is the fundamental economic problem?
a. controlling the stock market b. government intervention into markets
c. solving the problem of poverty d. scarcity and how people deal with it
ANSWER: d
12. What do all economic problems arise from?
a. scarcity b. not enough money
c. unemployment d. competition
ANSWER: a
13. As defined by an economist, what does the word scarcity mean?
a. Consumers are too poor to purchase the available goods and services.
b. Demand exceeds supply at the current market price.
c. The desire for goods exceeds our ability to produce them with limited available resources.
d. Supply exceeds demand at the current market price.
ANSWER: c
14. Which statement best describes the problem of scarcity?
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,Name: Class: Date:
Chapter 1 - The Role and Method of Economics
a. Scarcity means that shortages always occur in a market.
b. It is impossible to satisfy unlimited human wants with limited resources.
c. Because of scarcity, individuals do not face trade-offs when making decisions.
d. As a result of scarcity, individuals do not have the ability to make choices.
ANSWER: b
15. What problem is caused when NOT all human wants can be satisfied through current resources and
technology?
a. scarcity b. positive economics
c. unemployment d. marginal costs
ANSWER: a
16. What does economics primarily study?
a. how to interpret corporate balance sheets and income statements
b. how choices are made because of scarcity
c. how to make money in the stock market
d. how to operate a business
ANSWER: b
17. What do economists mean when they say goods are scarce?
a. Government programs are needed to lift families out of poverty.
b. At the current price, consumers are willing to buy more of a good than suppliers are willing to
produce.
c. Consumers do not have enough money to purchase the goods available.
d. The desire for goods and services exceeds our ability to produce them with limited resources.
ANSWER: d
18. Which statement about scarcity is the most accurate?
a. It is a problem that exists only in developing countries.
b. It is a problem only in capitalistic economies.
c. It is a problem that necessitates making choices that result in trade-offs.
d. It is a problem only in the developed world.
ANSWER: c
19. Which of the following most accurately describes a scarce good?
a. a good for which available resources are insufficient to satisfy unlimited human desires for it
b. a good that is always in demand at any price
c. a good for which there is a shortage at the current market price
d. a good for which it is impossible to increase production any further given the available
resources and technology
ANSWER: a
20. Which of the following questions is economics fundamentally concerned with?
a. How are limited wants allocated to satisfy limited resources?
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,Name: Class: Date:
Chapter 1 - The Role and Method of Economics
b. How are limited resources allocated to satisfy unlimited wants?
c. How are scarce resources allocated to satisfy limited wants?
d. How are limited resources allocated to satisfy scarce wants?
ANSWER: b
21. Which statement best describes the study of scarcity?
a. using limited resources to best satisfy our unlimited desires
b. using limited resources to promote full employment and price stability
c. using unlimited resources to promote full employment and price stability
d. using unlimited resources to best satisfy our unlimited desires
ANSWER: a
22. What is the primary concern of economics?
a. studying limited desires in the face of unlimited resources
b. studying problems such as poverty and unemployment
c. studying production and distribution of goods in a world of unlimited resources
d. studying production and distribution of goods in a world of limited resources
ANSWER: d
23. Which statement about economics is the most accurate?
a. It explores how choices are made between conflicting wants and desires in a world of scarcity.
b. Its main focus is the analysis of normative statements.
c. It typically uses controlled experiments to learn about consumer and firm behaviour.
d. It uses models that cannot be tested empirically due to the complex nature of the economy.
ANSWER: a
24. What is the solution to solving the fundamental economic problem?
a. to allocate limited resources among competing uses
b. to guarantee all humans have a minimum level of food, shelter, and clean water
c. to eliminate poverty in the developing world
d. to increase the amount of leisure time available to people
ANSWER: a
25. Which of the following is considered to be our single most precious resource?
a. money b. oil
c. time d. precious metals
ANSWER: c
26. Which of the following statements about the scope of economics is the most accurate?
a. Economics applies only to business situations.
b. Economics deals with solely the interaction of individuals and businesses in the marketplace.
c. Economics is all theory, and much of it does not apply to everyday life.
d. Economics applies, in part, to almost everything since so many facets of our lives are about
Copyright Cengage Learning. Powered by Cognero. Page 4
,Name: Class: Date:
Chapter 1 - The Role and Method of Economics
decision making with limited resources.
ANSWER: d
27. Which statement about economics is the most accurate?
a. It is concerned with predicting market conditions in the future, not with the current economic
state of affairs.
b. It is a physical science, much like physics and geology.
c. It is composed of two schools of thought known as positive and normative economics.
d. It is a science concerned with reaching generalizations about human behaviour, like sociology
or psychology.
ANSWER: d
28. Which statement about economics is the most accurate?
a. It concerns itself only with monetary decisions.
b. It says very little about "everyday life."
c. It is a narrowly focused discipline.
d. It is a broad-ranging, problem-solving discipline.
ANSWER: d
29. Which of the following would be studied in a microeconomics course?
a. how the economy measures unemployment
b. the amount of national debt
c. the consumption decisions made by individuals
d. the effect of rising prices on the economy
ANSWER: c
30. Who makes economic decisions?
a. They are made only by government leaders.
b. They are made in both the private and public sectors.
c. They are made only where monetary exchanges take place.
d. They are made only at the management level of corporations.
ANSWER: b
31. What is the basic difference between macroeconomics and microeconomics?
a. Microeconomics explores the causes of inflation, while macroeconomics focuses on the
causes of unemployment.
b. Microeconomics concentrates on the behaviour of individual consumers, while
macroeconomics focuses on the behaviour of firms.
c. Microeconomics concentrates on the behaviour of individual consumers and firms, while
macroeconomics focuses on the performance of the entire economy.
d. Microeconomics concentrates on individual markets, while macroeconomics focuses
primarily on the mechanics of the stock market.
ANSWER: c
Copyright Cengage Learning. Powered by Cognero. Page 5
,Name: Class: Date:
Chapter 1 - The Role and Method of Economics
32. What are economics’ two main branches of study?
a. free and closed markets b. microeconomics and macroeconomics
c. fiscal and monetary policies d. normative and positive economics
ANSWER: b
33. Which of the following is most likely a topic of discussion in macroeconomics?
a. a decrease in the price of steel
b. an increase in the production of 4K televisions
c. an increase in the inflation rate
d. a decrease in the sales of high-priced luxury SUVs
ANSWER: c
34. What is the term for the branch of economics that studies the decisions made by individual firms and
consumers?
a. microeconomics b. capitalism
c. macroeconomics d. consumerism
ANSWER: a
35. Which term refers to the branch of economics that studies the aggregate decisions of all households
and all firms?
a. normative economics b. microeconomics
c. positive economics d. macroeconomics
ANSWER: d
36. Which statement would most likely be within the realm of microeconomics?
a. The government decreased spending in the final quarter of the year.
b. The price of oranges increased due to a cold winter in Florida.
c. The unemployment rate increased due to a global recession.
d. The inflation rate decreased after the Bank of Canada increased interest rates.
ANSWER: b
37. Which statement would most likely be within the realm of macroeconomics?
a. The pharmaceutical industry is dominated by a few large firms.
b. The government sets spending amounts and tax rates.
c. The wages of baseball players are very high compared to kindergarten teachers.
d. The quantity of computers demanded will increase as prices decrease.
ANSWER: b
38. What type of science do most people consider economics to be?
a. social science b. life science
c. physical science d. formal science
ANSWER: a
39. Which topic does macroeconomics usually NOT include?
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,Name: Class: Date:
Chapter 1 - The Role and Method of Economics
a. the rate of employment b. the cost of living
c. the different kinds of business competition d. the interest rates
ANSWER: c
40. Which of the following lies primarily within the realm of microeconomics?
a. an economic model forecasting the impact of a tax decrease on consumer spending and
national income
b. a model forecasting the impact of a change in interest rates on the level of business investment
in the economy
c. a statistical analysis of the relationship between the growth of the money supply and the rate
of inflation
d. a study of supply and demand conditions in the market for orange juice
ANSWER: d
41. Which of the following lies primarily within the realm of macroeconomics?
a. the price elasticity of demand for online streaming services
b. the impact of technology on economic growth
c. the influence advertising has on children and what toys become popular
d. the effect of a wage change on the productivity of manufacturing workers
ANSWER: b
42. What is most likely a topic of discussion in a microeconomics course?
a. the amount of government spending
b. the number of individuals who lose their job because of structural changes in the economy
c. the average cost of producing coffee due to flooding
d. the share of national income paid to the government in taxes
ANSWER: c
43. What is the basic difference between macroeconomics and microeconomics?
a. Microeconomics is concerned with the trees (individual markets), while macroeconomics is
concerned with the forest (aggregate markets).
b. Macroeconomics is concerned with positive economics, while microeconomics is concerned
with normative economics.
c. Macroeconomics is concerned with policy decisions, while microeconomics applies only to
theory.
d. Microeconomics looks at the forest (aggregate markets), while macroeconomics is concerned
with the trees (individual markets).
ANSWER: a
44. What is the term for the branch of economics that focuses on outcomes in highly aggregated markets,
such as the markets for labour or consumer products?
a. government economics b. macroeconomics
c. efficiency economics d. monopoly economics
ANSWER: b
Copyright Cengage Learning. Powered by Cognero. Page 7
, Name: Class: Date:
Chapter 1 - The Role and Method of Economics
45. Which term refers to the branch of economics that focuses on the conduct of affairs within narrowly
defined units, such as households or business firms?
a. macroeconomics b. positive economics
c. applied economics d. microeconomics
ANSWER: d
46. What topic does microeconomics NOT usually include?
a. how firms choose output to maximize profits
b. how consumers maximize utility subject to a budget constraint
c. how wages are determined in the labour market
d. how national income is calculated
ANSWER: d
47. Which term refers to the branch of economics that studies the economy as a whole?
a. positive economics b. microeconomics
c. monetary economics d. macroeconomics
ANSWER: d
48. Which statement best describes macroeconomics?
a. It is narrower in scope than microeconomics.
b. It is concerned with the expansion of privately owned firms into large corporations.
c. It is concerned with the expansion and contraction of the overall economy.
d. It analyzes mergers and acquisitions between monopolies.
ANSWER: c
49. Which topic does microeconomics NOT usually include?
a. the determinants of the demand for smartphones
b. government spending and taxation
c. the impact of increasing the minimum wage
d. the barriers to entry that are needed for a monopoly to exist
ANSWER: b
50. Which topic does macroeconomics NOT generally include?
a. government spending and taxation
b. the impact of large government budget deficits on private investment spending
c. the determinants of the supply of wheat by farmers
d. the relationship between consumption and aggregate expenditures
ANSWER: c
51. Which area of study is most concerned with measuring the rate of inflation?
a. macroeconomics b. normative economics
c. capitalist economics d. growth economics
ANSWER: a
Copyright Cengage Learning. Powered by Cognero. Page 8
Edition Robert L. Sexton
Notes
1- The file is chapter after chapter.
2- We have shown you few pages sample.
3- The file contains all Appendix and Excel sheet
if it exists.
4- We have all what you need, we make update
at every time. There are many new editions
waiting you.
5- If you think you purchased the wrong file You
can contact us at every time, we can replace it
with true one.
Our email:
,Name: Class: Date:
Chapter 1 - The Role and Method of Economics
1. What is economics most concerned with?
a. keeping interest rates low
b. making money in the stock market
c. allocating scarce resources to satisfy unlimited wants
d. governments’ efficient spending of tax revenues
ANSWER: c
2. What is the central concern of economics?
a. regulating the stock market
b. promoting greed and profit-making behaviour at all costs
c. finding more resources to satisfy everyone's wants
d. making the best use of scarce resources to satisfy our unlimited wants
ANSWER: d
3. Why is there scarcity?
a. because marginal costs tend to exceed marginal benefits
b. because human wants and needs are limited
c. because Canada has too many people living in poverty
d. because our unlimited wants exceed our limited resources
ANSWER: d
4. Why does the problem of scarcity exist?
a. because resources are limited, relative to wants
b. because governments fail to intervene in the marketplace
c. because resources are unlimited, relative to wants
d. because the world has many people living in poverty
ANSWER: a
5. What does scarcity result from?
a. government policies
b. people not understanding economics
c. wants that exceed the resources necessary to provide them
d. a decrease in hard workers
ANSWER: c
6. What causes scarcity?
a. the allocation of goods by prices b. specialization and division of labour
c. unlimited wants and limited resources d. the market mechanism
ANSWER: c
7. What does economics primarily explore?
a. how the government allocates its budget among competing political interests
b. how stock and bond prices fluctuate in response to changes in demand or supply
Copyright Cengage Learning. Powered by Cognero. Page 1
,Name: Class: Date:
Chapter 1 - The Role and Method of Economics
c. how goods and services are produced and distributed in a world with limited resources
d. how businesses market products under competitive conditions
ANSWER: c
8. What does economics primarily study?
a. how firms compete for profits in the marketplace
b. how limited resources are allocated to satisfy unlimited wants
c. how we deal with unemployed resources
d. how prices are set in the marketplace
ANSWER: b
9. What do economists mean when they state that a good is scarce?
a. People will want to buy more of the good regardless of price.
b. It is impossible to expand the availability of the good.
c. Our wants exceed our limited resources.
d. There is a shortage of goods at the going price.
ANSWER: c
10. Which of the following statements about scarcity is the most accurate?
a. It occurs only in centrally planned economies.
b. It will likely be eliminated by technological progress.
c. It occurs when there are insufficient resources to provide for human wants.
d. It exists only in poor nations.
ANSWER: c
11. According to most economists, what is the fundamental economic problem?
a. controlling the stock market b. government intervention into markets
c. solving the problem of poverty d. scarcity and how people deal with it
ANSWER: d
12. What do all economic problems arise from?
a. scarcity b. not enough money
c. unemployment d. competition
ANSWER: a
13. As defined by an economist, what does the word scarcity mean?
a. Consumers are too poor to purchase the available goods and services.
b. Demand exceeds supply at the current market price.
c. The desire for goods exceeds our ability to produce them with limited available resources.
d. Supply exceeds demand at the current market price.
ANSWER: c
14. Which statement best describes the problem of scarcity?
Copyright Cengage Learning. Powered by Cognero. Page 2
,Name: Class: Date:
Chapter 1 - The Role and Method of Economics
a. Scarcity means that shortages always occur in a market.
b. It is impossible to satisfy unlimited human wants with limited resources.
c. Because of scarcity, individuals do not face trade-offs when making decisions.
d. As a result of scarcity, individuals do not have the ability to make choices.
ANSWER: b
15. What problem is caused when NOT all human wants can be satisfied through current resources and
technology?
a. scarcity b. positive economics
c. unemployment d. marginal costs
ANSWER: a
16. What does economics primarily study?
a. how to interpret corporate balance sheets and income statements
b. how choices are made because of scarcity
c. how to make money in the stock market
d. how to operate a business
ANSWER: b
17. What do economists mean when they say goods are scarce?
a. Government programs are needed to lift families out of poverty.
b. At the current price, consumers are willing to buy more of a good than suppliers are willing to
produce.
c. Consumers do not have enough money to purchase the goods available.
d. The desire for goods and services exceeds our ability to produce them with limited resources.
ANSWER: d
18. Which statement about scarcity is the most accurate?
a. It is a problem that exists only in developing countries.
b. It is a problem only in capitalistic economies.
c. It is a problem that necessitates making choices that result in trade-offs.
d. It is a problem only in the developed world.
ANSWER: c
19. Which of the following most accurately describes a scarce good?
a. a good for which available resources are insufficient to satisfy unlimited human desires for it
b. a good that is always in demand at any price
c. a good for which there is a shortage at the current market price
d. a good for which it is impossible to increase production any further given the available
resources and technology
ANSWER: a
20. Which of the following questions is economics fundamentally concerned with?
a. How are limited wants allocated to satisfy limited resources?
Copyright Cengage Learning. Powered by Cognero. Page 3
,Name: Class: Date:
Chapter 1 - The Role and Method of Economics
b. How are limited resources allocated to satisfy unlimited wants?
c. How are scarce resources allocated to satisfy limited wants?
d. How are limited resources allocated to satisfy scarce wants?
ANSWER: b
21. Which statement best describes the study of scarcity?
a. using limited resources to best satisfy our unlimited desires
b. using limited resources to promote full employment and price stability
c. using unlimited resources to promote full employment and price stability
d. using unlimited resources to best satisfy our unlimited desires
ANSWER: a
22. What is the primary concern of economics?
a. studying limited desires in the face of unlimited resources
b. studying problems such as poverty and unemployment
c. studying production and distribution of goods in a world of unlimited resources
d. studying production and distribution of goods in a world of limited resources
ANSWER: d
23. Which statement about economics is the most accurate?
a. It explores how choices are made between conflicting wants and desires in a world of scarcity.
b. Its main focus is the analysis of normative statements.
c. It typically uses controlled experiments to learn about consumer and firm behaviour.
d. It uses models that cannot be tested empirically due to the complex nature of the economy.
ANSWER: a
24. What is the solution to solving the fundamental economic problem?
a. to allocate limited resources among competing uses
b. to guarantee all humans have a minimum level of food, shelter, and clean water
c. to eliminate poverty in the developing world
d. to increase the amount of leisure time available to people
ANSWER: a
25. Which of the following is considered to be our single most precious resource?
a. money b. oil
c. time d. precious metals
ANSWER: c
26. Which of the following statements about the scope of economics is the most accurate?
a. Economics applies only to business situations.
b. Economics deals with solely the interaction of individuals and businesses in the marketplace.
c. Economics is all theory, and much of it does not apply to everyday life.
d. Economics applies, in part, to almost everything since so many facets of our lives are about
Copyright Cengage Learning. Powered by Cognero. Page 4
,Name: Class: Date:
Chapter 1 - The Role and Method of Economics
decision making with limited resources.
ANSWER: d
27. Which statement about economics is the most accurate?
a. It is concerned with predicting market conditions in the future, not with the current economic
state of affairs.
b. It is a physical science, much like physics and geology.
c. It is composed of two schools of thought known as positive and normative economics.
d. It is a science concerned with reaching generalizations about human behaviour, like sociology
or psychology.
ANSWER: d
28. Which statement about economics is the most accurate?
a. It concerns itself only with monetary decisions.
b. It says very little about "everyday life."
c. It is a narrowly focused discipline.
d. It is a broad-ranging, problem-solving discipline.
ANSWER: d
29. Which of the following would be studied in a microeconomics course?
a. how the economy measures unemployment
b. the amount of national debt
c. the consumption decisions made by individuals
d. the effect of rising prices on the economy
ANSWER: c
30. Who makes economic decisions?
a. They are made only by government leaders.
b. They are made in both the private and public sectors.
c. They are made only where monetary exchanges take place.
d. They are made only at the management level of corporations.
ANSWER: b
31. What is the basic difference between macroeconomics and microeconomics?
a. Microeconomics explores the causes of inflation, while macroeconomics focuses on the
causes of unemployment.
b. Microeconomics concentrates on the behaviour of individual consumers, while
macroeconomics focuses on the behaviour of firms.
c. Microeconomics concentrates on the behaviour of individual consumers and firms, while
macroeconomics focuses on the performance of the entire economy.
d. Microeconomics concentrates on individual markets, while macroeconomics focuses
primarily on the mechanics of the stock market.
ANSWER: c
Copyright Cengage Learning. Powered by Cognero. Page 5
,Name: Class: Date:
Chapter 1 - The Role and Method of Economics
32. What are economics’ two main branches of study?
a. free and closed markets b. microeconomics and macroeconomics
c. fiscal and monetary policies d. normative and positive economics
ANSWER: b
33. Which of the following is most likely a topic of discussion in macroeconomics?
a. a decrease in the price of steel
b. an increase in the production of 4K televisions
c. an increase in the inflation rate
d. a decrease in the sales of high-priced luxury SUVs
ANSWER: c
34. What is the term for the branch of economics that studies the decisions made by individual firms and
consumers?
a. microeconomics b. capitalism
c. macroeconomics d. consumerism
ANSWER: a
35. Which term refers to the branch of economics that studies the aggregate decisions of all households
and all firms?
a. normative economics b. microeconomics
c. positive economics d. macroeconomics
ANSWER: d
36. Which statement would most likely be within the realm of microeconomics?
a. The government decreased spending in the final quarter of the year.
b. The price of oranges increased due to a cold winter in Florida.
c. The unemployment rate increased due to a global recession.
d. The inflation rate decreased after the Bank of Canada increased interest rates.
ANSWER: b
37. Which statement would most likely be within the realm of macroeconomics?
a. The pharmaceutical industry is dominated by a few large firms.
b. The government sets spending amounts and tax rates.
c. The wages of baseball players are very high compared to kindergarten teachers.
d. The quantity of computers demanded will increase as prices decrease.
ANSWER: b
38. What type of science do most people consider economics to be?
a. social science b. life science
c. physical science d. formal science
ANSWER: a
39. Which topic does macroeconomics usually NOT include?
Copyright Cengage Learning. Powered by Cognero. Page 6
,Name: Class: Date:
Chapter 1 - The Role and Method of Economics
a. the rate of employment b. the cost of living
c. the different kinds of business competition d. the interest rates
ANSWER: c
40. Which of the following lies primarily within the realm of microeconomics?
a. an economic model forecasting the impact of a tax decrease on consumer spending and
national income
b. a model forecasting the impact of a change in interest rates on the level of business investment
in the economy
c. a statistical analysis of the relationship between the growth of the money supply and the rate
of inflation
d. a study of supply and demand conditions in the market for orange juice
ANSWER: d
41. Which of the following lies primarily within the realm of macroeconomics?
a. the price elasticity of demand for online streaming services
b. the impact of technology on economic growth
c. the influence advertising has on children and what toys become popular
d. the effect of a wage change on the productivity of manufacturing workers
ANSWER: b
42. What is most likely a topic of discussion in a microeconomics course?
a. the amount of government spending
b. the number of individuals who lose their job because of structural changes in the economy
c. the average cost of producing coffee due to flooding
d. the share of national income paid to the government in taxes
ANSWER: c
43. What is the basic difference between macroeconomics and microeconomics?
a. Microeconomics is concerned with the trees (individual markets), while macroeconomics is
concerned with the forest (aggregate markets).
b. Macroeconomics is concerned with positive economics, while microeconomics is concerned
with normative economics.
c. Macroeconomics is concerned with policy decisions, while microeconomics applies only to
theory.
d. Microeconomics looks at the forest (aggregate markets), while macroeconomics is concerned
with the trees (individual markets).
ANSWER: a
44. What is the term for the branch of economics that focuses on outcomes in highly aggregated markets,
such as the markets for labour or consumer products?
a. government economics b. macroeconomics
c. efficiency economics d. monopoly economics
ANSWER: b
Copyright Cengage Learning. Powered by Cognero. Page 7
, Name: Class: Date:
Chapter 1 - The Role and Method of Economics
45. Which term refers to the branch of economics that focuses on the conduct of affairs within narrowly
defined units, such as households or business firms?
a. macroeconomics b. positive economics
c. applied economics d. microeconomics
ANSWER: d
46. What topic does microeconomics NOT usually include?
a. how firms choose output to maximize profits
b. how consumers maximize utility subject to a budget constraint
c. how wages are determined in the labour market
d. how national income is calculated
ANSWER: d
47. Which term refers to the branch of economics that studies the economy as a whole?
a. positive economics b. microeconomics
c. monetary economics d. macroeconomics
ANSWER: d
48. Which statement best describes macroeconomics?
a. It is narrower in scope than microeconomics.
b. It is concerned with the expansion of privately owned firms into large corporations.
c. It is concerned with the expansion and contraction of the overall economy.
d. It analyzes mergers and acquisitions between monopolies.
ANSWER: c
49. Which topic does microeconomics NOT usually include?
a. the determinants of the demand for smartphones
b. government spending and taxation
c. the impact of increasing the minimum wage
d. the barriers to entry that are needed for a monopoly to exist
ANSWER: b
50. Which topic does macroeconomics NOT generally include?
a. government spending and taxation
b. the impact of large government budget deficits on private investment spending
c. the determinants of the supply of wheat by farmers
d. the relationship between consumption and aggregate expenditures
ANSWER: c
51. Which area of study is most concerned with measuring the rate of inflation?
a. macroeconomics b. normative economics
c. capitalist economics d. growth economics
ANSWER: a
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