Principles of Microeconomics Test
Item File 2
Ninth Edition by
Case/Fair/Oster
Prentice Hall
,Contents
Chapter 1 The Scope and Method of Economics 1
Chapter 2 The Economic Problem: Scarcity and Choice 29
Chapter 3 Demand, Supply, and Market Equilibrium 55
Chapter 4 Demand and Supply Applications 98
Chapter 5 Elasticity 117
Chapter 6 Household Behavior and Consumer Choice 135
Chapter 7 The Production Process: The Behavior of Profit-Maximizing Firms 171
Chapter 8 Short-Run Costs and Output Decisions 207
Chapter 9 Long-Run Costs and Output Decisions 252
Chapter 10 Input Demand: The Labor and Land Markets 292
Chapter 11 Input Demand: The Capital Markets and Investment Decision 323
Chapter 12 General Equilibrium and the Efficiency of Perfect Competition 348
Chapter 13 Monopoly and Antitrust Policy 377
Chapter 14 Oligopoly 425
Chapter 15 Monopolistic Competition 449
Chapter 16 Externalities, Public Goods, Imperfect Information,
and Social Choice 476
Chapter 17 Uncertainty and Asymmetric Information 517
Chapter 18 Income Distribution and Poverty 535
Chapter 19 Public Finance: The Economics of Taxation 563
Chapter 20 International Trade, Comparative Advantage, and Protectionism 592
Chapter 21 Economic Growth in Developing and Transitional Economies 628
,Chapter 1 The Scope and Method of Economics
1.1 Why Study Economics?
1 Multiple Choice
1) The reasons to study economics include which of the following?
A) to be an informed voter B) to understand society and global affairs
C) to learn a way of thinking D) all of the above
Answer: D
Diff: 1
Topic: Why Study Economics?
Skill: Fact
2) Marginalism is
A) the best alternative that we forego when making a decision.
B) the study of how societies choose to use scarce resources.
C) a market situation in which profit opportunities are eliminated almost instantaneously.
D) the process of analyzing the additional costs or benefits arising from a decision.
Answer: D
Diff: 1
Topic: Why Study Economics?
Skill: Definition
3) Economics is best defined as the study of
A) financial decision-making.
B) how consumers make purchasing decisions.
C) choices made by people faced with scarcity.
D) inflation, unemployment, and economic growth.
Answer: C
Diff: 2
Topic: Why Study Economics?
Skill: Definition
4) The Industrial Revolution refers to the rise of the modern factory system in during
the late eighteenth and early nineteenth centuries.
A) the United States B) England
C) France D) Germany
Answer: B
Diff: 1
Topic: Why Study Economics?
Skill: Fact
1
, 5) Which of the following statements is correct?
A) Economics is a natural science.
B) In large measure, economics is the study of how people make choices.
C) If poverty was eliminated there would be no reason to study economics.
D) Economic analysis can be used to explain how societies, but not individuals, make
decisions.
Answer: B
Diff: 1
Topic: Why Study Economics?
Skill: Fact
6) Economics is the study of
A) how to invest in the stock market.
B) how society uses limited resources.
C) the role of money in markets.
D) how government officials decide which goods and services are produced.
Answer: B
Diff: 2
Topic: Why Study Economics?
Skill: Definition
7) Costs that cannot be avoided, because they have already been incurred are known as
A) differential costs. B) marginal costs.
C) opportunity costs. D) sunk costs.
Answer: D
Diff: 2
Topic: Why Study Economics?
Skill: Definition
8) Suppose that two weeks ago you purchased a ticket to the symphony for $40. Last week
someone invited you to go camping on the same night as the symphony concert. You would
much rather go camping than go to the symphony. You have tried unsuccessfully to sell the
symphony concert ticket. Which of the following statements regarding this situation is correct?
A) The $40 symphony ticket should be irrelevant in your decision making, because it
represents the marginal cost of going camping.
B) The $40 you paid for the symphony ticket should be irrelevant in your decision making,
because it is a sunk cost.
C) The $40 you paid for the symphony ticket is relevant to the decision, as this represents
the opportunity cost of going camping.
D) You should base your decision on whether or not going camping will provide you with
more than $40 in satisfaction.
Answer: B
Diff: 2
Topic: Why Study Economics?
Skill: Conceptual
AACSB: Reflective Thinking
2
Item File 2
Ninth Edition by
Case/Fair/Oster
Prentice Hall
,Contents
Chapter 1 The Scope and Method of Economics 1
Chapter 2 The Economic Problem: Scarcity and Choice 29
Chapter 3 Demand, Supply, and Market Equilibrium 55
Chapter 4 Demand and Supply Applications 98
Chapter 5 Elasticity 117
Chapter 6 Household Behavior and Consumer Choice 135
Chapter 7 The Production Process: The Behavior of Profit-Maximizing Firms 171
Chapter 8 Short-Run Costs and Output Decisions 207
Chapter 9 Long-Run Costs and Output Decisions 252
Chapter 10 Input Demand: The Labor and Land Markets 292
Chapter 11 Input Demand: The Capital Markets and Investment Decision 323
Chapter 12 General Equilibrium and the Efficiency of Perfect Competition 348
Chapter 13 Monopoly and Antitrust Policy 377
Chapter 14 Oligopoly 425
Chapter 15 Monopolistic Competition 449
Chapter 16 Externalities, Public Goods, Imperfect Information,
and Social Choice 476
Chapter 17 Uncertainty and Asymmetric Information 517
Chapter 18 Income Distribution and Poverty 535
Chapter 19 Public Finance: The Economics of Taxation 563
Chapter 20 International Trade, Comparative Advantage, and Protectionism 592
Chapter 21 Economic Growth in Developing and Transitional Economies 628
,Chapter 1 The Scope and Method of Economics
1.1 Why Study Economics?
1 Multiple Choice
1) The reasons to study economics include which of the following?
A) to be an informed voter B) to understand society and global affairs
C) to learn a way of thinking D) all of the above
Answer: D
Diff: 1
Topic: Why Study Economics?
Skill: Fact
2) Marginalism is
A) the best alternative that we forego when making a decision.
B) the study of how societies choose to use scarce resources.
C) a market situation in which profit opportunities are eliminated almost instantaneously.
D) the process of analyzing the additional costs or benefits arising from a decision.
Answer: D
Diff: 1
Topic: Why Study Economics?
Skill: Definition
3) Economics is best defined as the study of
A) financial decision-making.
B) how consumers make purchasing decisions.
C) choices made by people faced with scarcity.
D) inflation, unemployment, and economic growth.
Answer: C
Diff: 2
Topic: Why Study Economics?
Skill: Definition
4) The Industrial Revolution refers to the rise of the modern factory system in during
the late eighteenth and early nineteenth centuries.
A) the United States B) England
C) France D) Germany
Answer: B
Diff: 1
Topic: Why Study Economics?
Skill: Fact
1
, 5) Which of the following statements is correct?
A) Economics is a natural science.
B) In large measure, economics is the study of how people make choices.
C) If poverty was eliminated there would be no reason to study economics.
D) Economic analysis can be used to explain how societies, but not individuals, make
decisions.
Answer: B
Diff: 1
Topic: Why Study Economics?
Skill: Fact
6) Economics is the study of
A) how to invest in the stock market.
B) how society uses limited resources.
C) the role of money in markets.
D) how government officials decide which goods and services are produced.
Answer: B
Diff: 2
Topic: Why Study Economics?
Skill: Definition
7) Costs that cannot be avoided, because they have already been incurred are known as
A) differential costs. B) marginal costs.
C) opportunity costs. D) sunk costs.
Answer: D
Diff: 2
Topic: Why Study Economics?
Skill: Definition
8) Suppose that two weeks ago you purchased a ticket to the symphony for $40. Last week
someone invited you to go camping on the same night as the symphony concert. You would
much rather go camping than go to the symphony. You have tried unsuccessfully to sell the
symphony concert ticket. Which of the following statements regarding this situation is correct?
A) The $40 symphony ticket should be irrelevant in your decision making, because it
represents the marginal cost of going camping.
B) The $40 you paid for the symphony ticket should be irrelevant in your decision making,
because it is a sunk cost.
C) The $40 you paid for the symphony ticket is relevant to the decision, as this represents
the opportunity cost of going camping.
D) You should base your decision on whether or not going camping will provide you with
more than $40 in satisfaction.
Answer: B
Diff: 2
Topic: Why Study Economics?
Skill: Conceptual
AACSB: Reflective Thinking
2
