Microeconomics, 5e (Hubbard/O'Brien)
Chapter 1 Economics: Foundations and Models
1.1 Three Key Economic Ideas
1) Recent changes occurring within the U.S. health care system, including lower
insurance reimbursement rates, have resulted in
A) a growing number of doctor's choosing to open private practices.
B) more medical practices being owned by hospitals than by individual doctors.
C) a majority of hospitals closing routine medical practices in order to focus only on
emergency care facilities.
D) a majority of doctors working directly for insurance companies.
Answer: B
Diff: 2 Page Ref: 3
Topic: Scarcity
Learning Outcome: Micro-1: Identify the basic principles of economics and explain how
to think like an economist.
AACSB: Analytic thinking
Special Feature: Chapter Opener: Is the Private Doctor's Office Going to Disappear?
2) In economics, choices must be made because we live in a world of
A) unemployment.
B) scarcity.
C) greed.
D) unlimited resources.
Answer: B
,Diff: 1 Page Ref: 4
Topic: Scarcity
*: Recurring
Learning Outcome: Micro-1: Identify the basic principles of economics and explain how
to think like an economist.
AACSB: Analytic thinking
Special Feature: None
3) Which of the following statements is true about scarcity?
A) Scarcity refers to the situation in which unlimited wants exceed limited resources.
B) Scarcity is not a problem for the wealthy.
C) Scarcity is only a problem when a country has too large a population.
D) Scarcity arises when there is a wide disparity in income distribution.
Answer: A
Diff: 1 Page Ref: 4
Topic: Scarcity
*: Recurring
Learning Outcome: Micro-1: Identify the basic principles of economics and explain how
to think like an economist.
AACSB: Analytic thinking
Special Feature: None
4) The basic economic problem of ________ has always existed and will continue to
exist.
A) scarcity
B) efficiency
C) inflation
,D) recession
Answer: A
Diff: 1 Page Ref: 4
Topic: Scarcity
*: Recurring
Learning Outcome: Micro-1: Identify the basic principles of economics and explain how
to think like an economist.
AACSB: Analytic thinking
Special Feature: None
5) By definition, economics is the study of
A) how to make money in the stock market.
B) how to make money in a market economy.
C) the choices people make to attain their goals, given their scarce resources.
D) supply and demand.
Answer: C
Diff: 1 Page Ref: 4
Topic: Scarcity
*: Recurring
Learning Outcome: Micro-1: Identify the basic principles of economics and explain how
to think like an economist.
AACSB: Analytic thinking
Special Feature: None
6) An economic ________ is a simplified version of some aspect of economic life used to
analyze an economic issue.
, A) market
B) trade-off
C) variable
D) model
Answer: D
Diff: 1 Page Ref: 4
Topic: Economic Models
*: Recurring
Learning Outcome: Micro-1: Identify the basic principles of economics and explain how
to think like an economist.
AACSB: Analytic thinking
Special Feature: None
Chapter 1 Economics: Foundations and Models
1.1 Three Key Economic Ideas
1) Recent changes occurring within the U.S. health care system, including lower
insurance reimbursement rates, have resulted in
A) a growing number of doctor's choosing to open private practices.
B) more medical practices being owned by hospitals than by individual doctors.
C) a majority of hospitals closing routine medical practices in order to focus only on
emergency care facilities.
D) a majority of doctors working directly for insurance companies.
Answer: B
Diff: 2 Page Ref: 3
Topic: Scarcity
Learning Outcome: Micro-1: Identify the basic principles of economics and explain how
to think like an economist.
AACSB: Analytic thinking
Special Feature: Chapter Opener: Is the Private Doctor's Office Going to Disappear?
2) In economics, choices must be made because we live in a world of
A) unemployment.
B) scarcity.
C) greed.
D) unlimited resources.
Answer: B
,Diff: 1 Page Ref: 4
Topic: Scarcity
*: Recurring
Learning Outcome: Micro-1: Identify the basic principles of economics and explain how
to think like an economist.
AACSB: Analytic thinking
Special Feature: None
3) Which of the following statements is true about scarcity?
A) Scarcity refers to the situation in which unlimited wants exceed limited resources.
B) Scarcity is not a problem for the wealthy.
C) Scarcity is only a problem when a country has too large a population.
D) Scarcity arises when there is a wide disparity in income distribution.
Answer: A
Diff: 1 Page Ref: 4
Topic: Scarcity
*: Recurring
Learning Outcome: Micro-1: Identify the basic principles of economics and explain how
to think like an economist.
AACSB: Analytic thinking
Special Feature: None
4) The basic economic problem of ________ has always existed and will continue to
exist.
A) scarcity
B) efficiency
C) inflation
,D) recession
Answer: A
Diff: 1 Page Ref: 4
Topic: Scarcity
*: Recurring
Learning Outcome: Micro-1: Identify the basic principles of economics and explain how
to think like an economist.
AACSB: Analytic thinking
Special Feature: None
5) By definition, economics is the study of
A) how to make money in the stock market.
B) how to make money in a market economy.
C) the choices people make to attain their goals, given their scarce resources.
D) supply and demand.
Answer: C
Diff: 1 Page Ref: 4
Topic: Scarcity
*: Recurring
Learning Outcome: Micro-1: Identify the basic principles of economics and explain how
to think like an economist.
AACSB: Analytic thinking
Special Feature: None
6) An economic ________ is a simplified version of some aspect of economic life used to
analyze an economic issue.
, A) market
B) trade-off
C) variable
D) model
Answer: D
Diff: 1 Page Ref: 4
Topic: Economic Models
*: Recurring
Learning Outcome: Micro-1: Identify the basic principles of economics and explain how
to think like an economist.
AACSB: Analytic thinking
Special Feature: None
