TEST BANK 2021 Principles of Microeconomics Test Item File 2 Ninth Edition by Case/Fair/Oster

Test Item File to Accompany Principles of Microeconomics Test Item File 2 Ninth Edition by Case/Fair/Oster Prentice Hall c.2009 10/30/08 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 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. 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. 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 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. 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. 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. 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. Diff: 2 Topic: Why Study Economics? Skill: Conceptual AACSB: Reflective Thinking 9) You have decided that you want to attend a renaissance fair as King Henry VIII. You estimate that it will cost $80 to assemble your costume. After spending $80 on the costume, you realize that the additional pieces you need will cost you $20 more. The marginal cost of completing the costume is A) $20. B) $60. C) $80. D) $100. Diff: 2 Topic: Why Study Economics? Skill: Analytic AACSB: Analytic Skills 10) The concept of opportunity cost can be applied to the analysis of decision-making processes. A) only economy-wide B) only global C) only-small-scale D) any Diff: 2 Topic: Why Study Economics? Skill: Conceptual AACSB: Reflective Thinking 11) That which we forgo, or give up, when we make a choice or a decision is known as A) equity. B) causation. C) correlation. D) opportunity cost. Diff: 2 Topic: Why Study Economics? Skill: Definition 12) Scarce resources give rise to the concept of A) efficient markets. B) opportunity costs. C) laissez-faire. D) positive economics. Diff: 1 Topic: Why Study Economics? Skill: Fact 13) Which of the following is an opportunity cost of attending college? A) the cost of your apartment or dorm B) the income you could have earned if you didnʹt attend college C) the cost of the food that you consume while you are attending college D) the education you gain from attending college. Diff: 2 Topic: Why Study Economics? Skill: Conceptual AACSB: Reflective Thinking 14) If your tuition is $2,000 this semester, your books cost $400, you can only work 10 rather than 40 hours per week during the 15 weeks you are taking classes and you make $12 per hour, and your room and board is $4,000 this semester, then your opportunity cost of attending college this semester is A) $2,400. B) $2,760. C) $7,800. D) $11,800. Diff: 3 Topic: Why Study Economics? Skill: Analytic AACSB: Analytic Skills 15) If your tuition is $20,000 this semester, your books cost $2,000, you can only work 10 rather than 40 hours per week during the 15 weeks you are taking classes and you make $15 per hour, and your room and board is $8,000 this semester, then your opportunity cost of attending college this semester is A) $22,000. B) $22,150. C) $28,750. D) $36,750. Diff: 3 Topic: Why Study Economics? Skill: Analytic AACSB: Analytic Skills 16) If you own a condo and you decide to lease it to your cousin A) there is no opportunity cost of leasing the condo because you own it. B) there is an opportunity cost of leasing the condo because you could have chosen to live in it. C) there is no opportunity cost of leasing the condo because you collect rent from your cousin. D) the only cost relevant to this decision is the price you paid for the condo. Diff: 2 Topic: Why Study Economics? Skill: Conceptual AACSB: Reflective Thinking 17) You own The Wedding Crasher on DVD. The opportunity cost of watching this DVD for the fourth time A) is zero, since you own it. B) is one-fourth the cost of the DVD, as this is the fourth time you have watched it. C) is the value of the alternative use of the time you spend watching the DVD. D) must be the same as the opportunity cost of watching it the first time. Diff: 2 Topic: Why Study Economics? Skill: Conceptual AACSB: Reflective Thinking