..
.
.
. .
MICROECONOMICS 4TH EDITION (20 . . .
26
UPDATE) | COMPLETE TEST BANK
. . . . .
WITH 250+ VERIFIED QUESTION
. . .
S& .
CORRECT ANSWERS WITH MAR
. . .
KING SCHEME .
.
, 1.
1..A.simplified.representation.that.is.used.to.study.a.real.situation.is.called.a(n):.
A) model..
B) production.possibility.frontier..
C) assumption..
D) trade-off..
2..The.models.that.economists.construct:.
A) usually.make.simplifying.assumptions..
B) often.rely.on.physical.constructs,.such.as.those.used.by.architects..
C) rarely.use.mathematical.equations.or.graphs..
D) attempt.to.replicate.the.real.world..
3. When.building.a.model,.economists:.
A) simplify.reality.to.highlight.what.really.matters..
B) attempt.to.duplicate.reality.in.all.of.its.complexity..
C) ignore.the.facts.and.instead.try.to.determine.what.the.facts.should.be..
D) are.careful.to.avoid.the.scientific.method..
4. The.models.used.in.economics:.
A) are.always.limited.to.variables.that.are.directly.related..
B) are.essentially.not.reliable.because.they.are.not.testable.in.the.real.world..
C) are.of.necessity.unrealistic.and.not.related.to.the.real.world..
D) emphasize.basic.relationships.by.abstracting.from.complexities.in.the.everyday.
world..
5...Economic.models.are:.
A) set.up.and.used.to.duplicate.reality..
B) useless.if.they.are.simple..
C) made.generally.of.wood,.plastic,.and/or.metal..
D) often.useful.in.forming.economic.policy..
Page.2.
, 6...The.importance.of.an.economic.model.is.that.it.allows.us.to:.A).build.a.complex.and.accurate.
model.of.the.economy..
..
. .
B) build.an.accurate.mathematical.model.of.the.economy..
C) focus.on.the.effects.of.only.one.change.at.a.time..
D) avoid.opportunity.costs..
Page.1.
7..In.constructing.a.model,.economists:.
A) might.use.a.computer.simulation..
B) avoid.making.any.assumptions..
C) assume.that.all.relevant.factors.are.constantly.changing..
D) are.prohibited.from.using.mathematics..
8..
A.simplified.version.of.reality.that.is.used.to.clarify.economic.situations.is.called.a(n):.A).eco
nomic.fact..
B) current.event..
C) model..
D) scarce.resource..
9.. An.economic.model:.
A) is.useful.for.explaining.past.economic.conditions.but.not.for.predicting..
B) often.leads.to.faulty.conclusions.because.of.the.ceteris.paribus.assumption..
C) allows.nothing.to.change.in.the.economic.situation.that.is.being.described..D).is.a.sim
plified.version.of.reality.used.to.understand.real-world.economic.
conditions..
1.0..The.financial.meltdown.of.2008–..2009:.
A) was.accurately.predicted.by.an.economic.model..
B) was.due.to.excessive.investment.in.Internet.companies..
C) was.the.result.of.the.breakup.of.the.European.Union..
Page.3.
, D) resulted.partially.from.a.faulty.economic.model..
1.1..Wall.Street.is:.
A) a.district.in.New.York.City.where.all.major.investment.companies.have.their.headquart
ers..
B) a.district.in.New.York.City.where.most.fashion.designers.have.their.headquarters..
C) an.area.of.San.Francisco.where.imports.are.received.from.other.countries.and.from.whi
ch.exports.are.shipped..
D) a.street.in.Houston,.Texas,.where.major.oil.companies.have.their.headquarters..
1.2..A.mortgage-backed.security.is.an.asset.that:.
A) only.homeowners.are.allowed.to.purchase..
B) provides.earnings.to.its.owner.based.on.payments.made.by.people.on.their.home.
loans..
C) the.Federal.Reserve.uses.to.implement.monetary.policy..
D) is.an.important.part.of.the.circular-flow.diagram..
1.3..Before.2000,.investors.were.reluctant.to.buy.mortgage-
backed.securities.because:.A).economic.models.predicted.that.they.were.bad.investment
s..B).they.were.illegal.in.many.states..
C).they.could.not.calculate.the.risk.of.losing.money.on.mortgage-
backed.securities..D).it.was.difficult.to.obtain.the.foreign.currencies.that.were.required.for.p
urchasing.
them..
1.4..Investors.will.lose.money.on.mortgage-backed.securities.if:.A).interest.rates.are.too.low..
B) homeowners.don't.pay.their.mortgages..
C) homeowners.pay.off.their.mortgages.early..
D) the.average.price.of.a.house.increases.too.rapidly..
1.5..In.2000,.financial.experts.announced.that.they:.
A) would.no.longer.be.willing.to.buy.or.sell.mortgage-backed.securities..
B) were.unable.to.predict.expected.income.from.mortgage-backed.securities..
C) had.overestimated.the.risk.of.loss.from.mortgage-backed.securities..
D) had.developed.a.model.that.could.predict.the.risk.of.losing.money.on.mortgagebacked.s
ecurities..
1.6..In.2000,.the.market.for.mortgage-backed.securities:.
Page.4.
.
.
. .
MICROECONOMICS 4TH EDITION (20 . . .
26
UPDATE) | COMPLETE TEST BANK
. . . . .
WITH 250+ VERIFIED QUESTION
. . .
S& .
CORRECT ANSWERS WITH MAR
. . .
KING SCHEME .
.
, 1.
1..A.simplified.representation.that.is.used.to.study.a.real.situation.is.called.a(n):.
A) model..
B) production.possibility.frontier..
C) assumption..
D) trade-off..
2..The.models.that.economists.construct:.
A) usually.make.simplifying.assumptions..
B) often.rely.on.physical.constructs,.such.as.those.used.by.architects..
C) rarely.use.mathematical.equations.or.graphs..
D) attempt.to.replicate.the.real.world..
3. When.building.a.model,.economists:.
A) simplify.reality.to.highlight.what.really.matters..
B) attempt.to.duplicate.reality.in.all.of.its.complexity..
C) ignore.the.facts.and.instead.try.to.determine.what.the.facts.should.be..
D) are.careful.to.avoid.the.scientific.method..
4. The.models.used.in.economics:.
A) are.always.limited.to.variables.that.are.directly.related..
B) are.essentially.not.reliable.because.they.are.not.testable.in.the.real.world..
C) are.of.necessity.unrealistic.and.not.related.to.the.real.world..
D) emphasize.basic.relationships.by.abstracting.from.complexities.in.the.everyday.
world..
5...Economic.models.are:.
A) set.up.and.used.to.duplicate.reality..
B) useless.if.they.are.simple..
C) made.generally.of.wood,.plastic,.and/or.metal..
D) often.useful.in.forming.economic.policy..
Page.2.
, 6...The.importance.of.an.economic.model.is.that.it.allows.us.to:.A).build.a.complex.and.accurate.
model.of.the.economy..
..
. .
B) build.an.accurate.mathematical.model.of.the.economy..
C) focus.on.the.effects.of.only.one.change.at.a.time..
D) avoid.opportunity.costs..
Page.1.
7..In.constructing.a.model,.economists:.
A) might.use.a.computer.simulation..
B) avoid.making.any.assumptions..
C) assume.that.all.relevant.factors.are.constantly.changing..
D) are.prohibited.from.using.mathematics..
8..
A.simplified.version.of.reality.that.is.used.to.clarify.economic.situations.is.called.a(n):.A).eco
nomic.fact..
B) current.event..
C) model..
D) scarce.resource..
9.. An.economic.model:.
A) is.useful.for.explaining.past.economic.conditions.but.not.for.predicting..
B) often.leads.to.faulty.conclusions.because.of.the.ceteris.paribus.assumption..
C) allows.nothing.to.change.in.the.economic.situation.that.is.being.described..D).is.a.sim
plified.version.of.reality.used.to.understand.real-world.economic.
conditions..
1.0..The.financial.meltdown.of.2008–..2009:.
A) was.accurately.predicted.by.an.economic.model..
B) was.due.to.excessive.investment.in.Internet.companies..
C) was.the.result.of.the.breakup.of.the.European.Union..
Page.3.
, D) resulted.partially.from.a.faulty.economic.model..
1.1..Wall.Street.is:.
A) a.district.in.New.York.City.where.all.major.investment.companies.have.their.headquart
ers..
B) a.district.in.New.York.City.where.most.fashion.designers.have.their.headquarters..
C) an.area.of.San.Francisco.where.imports.are.received.from.other.countries.and.from.whi
ch.exports.are.shipped..
D) a.street.in.Houston,.Texas,.where.major.oil.companies.have.their.headquarters..
1.2..A.mortgage-backed.security.is.an.asset.that:.
A) only.homeowners.are.allowed.to.purchase..
B) provides.earnings.to.its.owner.based.on.payments.made.by.people.on.their.home.
loans..
C) the.Federal.Reserve.uses.to.implement.monetary.policy..
D) is.an.important.part.of.the.circular-flow.diagram..
1.3..Before.2000,.investors.were.reluctant.to.buy.mortgage-
backed.securities.because:.A).economic.models.predicted.that.they.were.bad.investment
s..B).they.were.illegal.in.many.states..
C).they.could.not.calculate.the.risk.of.losing.money.on.mortgage-
backed.securities..D).it.was.difficult.to.obtain.the.foreign.currencies.that.were.required.for.p
urchasing.
them..
1.4..Investors.will.lose.money.on.mortgage-backed.securities.if:.A).interest.rates.are.too.low..
B) homeowners.don't.pay.their.mortgages..
C) homeowners.pay.off.their.mortgages.early..
D) the.average.price.of.a.house.increases.too.rapidly..
1.5..In.2000,.financial.experts.announced.that.they:.
A) would.no.longer.be.willing.to.buy.or.sell.mortgage-backed.securities..
B) were.unable.to.predict.expected.income.from.mortgage-backed.securities..
C) had.overestimated.the.risk.of.loss.from.mortgage-backed.securities..
D) had.developed.a.model.that.could.predict.the.risk.of.losing.money.on.mortgagebacked.s
ecurities..
1.6..In.2000,.the.market.for.mortgage-backed.securities:.
Page.4.
