TEST BANK FOR MICROECONOMIC
CANADIAN EDITION BY MCCONN
, 1
Student: _ _ _ _ _ _ _ _ _
1. The key economic concept that serves as the basis for the study of economics is:
A. inflation.
B. unemployment.
C. money.
D. scarcity.
2. As a consequence of the condition of scarcity:
A. there is never enough of anything.
B. production has to be centrally planned.
C. things which are plentiful have relatively high prices.
D. individuals and communities have to make choices among alternatives.
3. In every economic system, choices must be made because resources are:
A. infinite, but economic wants are finite.
B. finite, but economic wants are insatiable.
C. unlimited, but economic wants are limited.
D. limited, and so are economic wants.
4. Opportunity cost is best defined as:
A. marginal cost minus marginal benefit.
B. the time spent on an economic activity.
C. the value of the best foregone alternative.
D. the money cost of an economic decision.
5. Tammie makes $150 a day as a bank clerk. She takes off two days of work without pay to fly to another city to
favourite music group. The cost of transportation for the trip is $250. The cost of the concert ticket is $50. Th
Tammie's trip to the concert is:
A. $300.
B. $450.
C. $500.
D. $600.
6. When a provincial government chooses to build more roads, the required resources are no longer available for
education. This dilemma illustrates the concept of:
A. marginal analysis.
B. full employment.
C. full production.
D. opportunity cost.
7. Specialization and trade are beneficial to society because:
A. the output of economic goods may be increased with no increase in resources.
B. scarce resources are utilized more efficiently.
C. a division of labour lowers prices for products.
D. All of these are correct.
8. When economists describe "a market," they mean:
,11. One of the basic economic defences of economic growth rests on the conclusion that:
A. growth makes workers less obsolete and more secure in employment.
B. growth reduces the cost of "common property" resources to society.
C. growth makes the gap between unlimited wants and scarce resources less acute.
D. a growth-oriented society confers a "work and look to the future" attitude on the members of society.
12. Concern about the general level of prices in an economy is primarily a concern about the economic goal of:
A. economic efficiency.
B. economic security.
C. price-level stability.
D. equity.
13. Assume that a tradeoff exists in the short run between inflation and unemployment. This relationship means th
A. a low rate of unemployment causes a low rate of inflation.
B. a high rate of inflation causes a low rate of unemployment.
C. less unemployment can be achieved with more inflation.
D. less unemployment can be achieved with less inflation.
14. The study of economics is primarily concerned with:
A. keeping private businesses from losing money.
B. demonstrating that capitalistic economies are superior to socialistic economies.
C. choices which are made in seeking to use scarce resources efficiently.
D. determining the most equitable distribution of society's output.
15. The assertion that "There is no free lunch" means:
A. there are always tradeoffs between economic goals.
B. all production involves the use of scarce resources and thus the sacrifice of alternative goods.
C. marginal analysis is not used in economic reasoning.
D. choices do not need be made if behaviour is rational.
16. The study of economics exists because:
A. government interferes with the efficient allocation of scarce resources.
B. resources are scarce in relation to human material wants.
C. the market system is an obstacle to the efficient use of plentiful resources to satisfy constrained wants.
D. resources are overly abundant as compared to wants; thus, an allocation problem exists.
17. Economics may best be defined as:
A. the interaction between macro and micro considerations.
B. the study of the behaviour of people and institutions in the production, distribution, and consumption of scarce
C. the empirical testing of value judgments through the use of induction and deduction.
D. the use of policy to refute facts and hypotheses.
18. Purposeful behaviour suggests that:
A. everyone will make identical choices.
B. resource availability exceeds material wants.
C. individuals will make different choices because their information and constraints differ.
D. an individual's economic goals cannot involve tradeoffs.
19. "Consumers spend their incomes to get the maximum benefit or satisfaction from the goods and services they
reflection of:
, C. all customer lines tending to be of equal length.
D. All of these.
23. How is the economic perspective reflected in lines for fast food?
A. Customers select the shortest line because they have perfect information.
B. Customers select the shortest line because they believe it will reduce their time cost of obtaining food.
C. Lines will typically be of unequal length because of the inefficiencies in counter service.
D. The set of food choices is often too complex for most customers and thus creates long lines.
24. From an economic perspective, when consumers leave a fast-food restaurant because the lines to be served are
concluded that the:
A. marginal cost of waiting is less than the marginal benefit of being served.
B. marginal cost of waiting is greater than the marginal benefit of being served.
C. management is exhibiting irrational behaviour by not maximizing profits.
D. management is making an assumption that other things are equal.
25. Consumers might leave a fast-food restaurant without being served because:
A. they are misinformed about the marginal cost and marginal benefits of the food being served.
B. they conclude that the marginal cost (monetary plus time costs) exceeds the marginal benefit.
C. the environment is not conducive to a rational choice.
D. the lines waiting for service are not of equal length.
26. At fast-food restaurants:
A. consumers enjoy complete and accurate information.
B. decisions are usually made by trial and error.
C. decisions entail comparisons of marginal costs and marginal benefits.
D. benefits always exceed costs.
27. Economics involves "marginal analysis" because:
A. most decisions involve changes in the status quo.
B. marginal benefits always exceed marginal costs.
C. marginal costs always exceed marginal benefits.
D. much economic behaviour is irrational.
28. You should decide to go to a movie:
A. if the marginal cost of the movie exceeds its marginal benefit.
B. if the marginal benefit of the movie exceeds its marginal cost.
C. if your income will allow you to buy a ticket.
D. because movies are inherently good products.
29. Marginal costs exist because:
A. the decision to produce more of some product means the sacrifice of other products.
B. wants are scarce relative to resources.
C. households and businesses make rational decisions.
D. most decisions do not involve sacrifices or tradeoffs.
30. Even though local newspapers are very inexpensive, people rarely buy more than one of them each day. This f
A. is an example of irrational behaviour.
B. implies that reading should be taught through phonics rather than the whole language method.
C. contradicts the economic perspective.
CANADIAN EDITION BY MCCONN
, 1
Student: _ _ _ _ _ _ _ _ _
1. The key economic concept that serves as the basis for the study of economics is:
A. inflation.
B. unemployment.
C. money.
D. scarcity.
2. As a consequence of the condition of scarcity:
A. there is never enough of anything.
B. production has to be centrally planned.
C. things which are plentiful have relatively high prices.
D. individuals and communities have to make choices among alternatives.
3. In every economic system, choices must be made because resources are:
A. infinite, but economic wants are finite.
B. finite, but economic wants are insatiable.
C. unlimited, but economic wants are limited.
D. limited, and so are economic wants.
4. Opportunity cost is best defined as:
A. marginal cost minus marginal benefit.
B. the time spent on an economic activity.
C. the value of the best foregone alternative.
D. the money cost of an economic decision.
5. Tammie makes $150 a day as a bank clerk. She takes off two days of work without pay to fly to another city to
favourite music group. The cost of transportation for the trip is $250. The cost of the concert ticket is $50. Th
Tammie's trip to the concert is:
A. $300.
B. $450.
C. $500.
D. $600.
6. When a provincial government chooses to build more roads, the required resources are no longer available for
education. This dilemma illustrates the concept of:
A. marginal analysis.
B. full employment.
C. full production.
D. opportunity cost.
7. Specialization and trade are beneficial to society because:
A. the output of economic goods may be increased with no increase in resources.
B. scarce resources are utilized more efficiently.
C. a division of labour lowers prices for products.
D. All of these are correct.
8. When economists describe "a market," they mean:
,11. One of the basic economic defences of economic growth rests on the conclusion that:
A. growth makes workers less obsolete and more secure in employment.
B. growth reduces the cost of "common property" resources to society.
C. growth makes the gap between unlimited wants and scarce resources less acute.
D. a growth-oriented society confers a "work and look to the future" attitude on the members of society.
12. Concern about the general level of prices in an economy is primarily a concern about the economic goal of:
A. economic efficiency.
B. economic security.
C. price-level stability.
D. equity.
13. Assume that a tradeoff exists in the short run between inflation and unemployment. This relationship means th
A. a low rate of unemployment causes a low rate of inflation.
B. a high rate of inflation causes a low rate of unemployment.
C. less unemployment can be achieved with more inflation.
D. less unemployment can be achieved with less inflation.
14. The study of economics is primarily concerned with:
A. keeping private businesses from losing money.
B. demonstrating that capitalistic economies are superior to socialistic economies.
C. choices which are made in seeking to use scarce resources efficiently.
D. determining the most equitable distribution of society's output.
15. The assertion that "There is no free lunch" means:
A. there are always tradeoffs between economic goals.
B. all production involves the use of scarce resources and thus the sacrifice of alternative goods.
C. marginal analysis is not used in economic reasoning.
D. choices do not need be made if behaviour is rational.
16. The study of economics exists because:
A. government interferes with the efficient allocation of scarce resources.
B. resources are scarce in relation to human material wants.
C. the market system is an obstacle to the efficient use of plentiful resources to satisfy constrained wants.
D. resources are overly abundant as compared to wants; thus, an allocation problem exists.
17. Economics may best be defined as:
A. the interaction between macro and micro considerations.
B. the study of the behaviour of people and institutions in the production, distribution, and consumption of scarce
C. the empirical testing of value judgments through the use of induction and deduction.
D. the use of policy to refute facts and hypotheses.
18. Purposeful behaviour suggests that:
A. everyone will make identical choices.
B. resource availability exceeds material wants.
C. individuals will make different choices because their information and constraints differ.
D. an individual's economic goals cannot involve tradeoffs.
19. "Consumers spend their incomes to get the maximum benefit or satisfaction from the goods and services they
reflection of:
, C. all customer lines tending to be of equal length.
D. All of these.
23. How is the economic perspective reflected in lines for fast food?
A. Customers select the shortest line because they have perfect information.
B. Customers select the shortest line because they believe it will reduce their time cost of obtaining food.
C. Lines will typically be of unequal length because of the inefficiencies in counter service.
D. The set of food choices is often too complex for most customers and thus creates long lines.
24. From an economic perspective, when consumers leave a fast-food restaurant because the lines to be served are
concluded that the:
A. marginal cost of waiting is less than the marginal benefit of being served.
B. marginal cost of waiting is greater than the marginal benefit of being served.
C. management is exhibiting irrational behaviour by not maximizing profits.
D. management is making an assumption that other things are equal.
25. Consumers might leave a fast-food restaurant without being served because:
A. they are misinformed about the marginal cost and marginal benefits of the food being served.
B. they conclude that the marginal cost (monetary plus time costs) exceeds the marginal benefit.
C. the environment is not conducive to a rational choice.
D. the lines waiting for service are not of equal length.
26. At fast-food restaurants:
A. consumers enjoy complete and accurate information.
B. decisions are usually made by trial and error.
C. decisions entail comparisons of marginal costs and marginal benefits.
D. benefits always exceed costs.
27. Economics involves "marginal analysis" because:
A. most decisions involve changes in the status quo.
B. marginal benefits always exceed marginal costs.
C. marginal costs always exceed marginal benefits.
D. much economic behaviour is irrational.
28. You should decide to go to a movie:
A. if the marginal cost of the movie exceeds its marginal benefit.
B. if the marginal benefit of the movie exceeds its marginal cost.
C. if your income will allow you to buy a ticket.
D. because movies are inherently good products.
29. Marginal costs exist because:
A. the decision to produce more of some product means the sacrifice of other products.
B. wants are scarce relative to resources.
C. households and businesses make rational decisions.
D. most decisions do not involve sacrifices or tradeoffs.
30. Even though local newspapers are very inexpensive, people rarely buy more than one of them each day. This f
A. is an example of irrational behaviour.
B. implies that reading should be taught through phonics rather than the whole language method.
C. contradicts the economic perspective.
