Test Bank for ECON MICRO 7, 7th Edition by William A. McEachern, Veronika Dolar || Newest Version 2024 A++

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Test Bank for ECON MICRO, 7th Edition by William A.
McEachern, Veronika Dolar A+
Chapter 01 ECON Micro7e


Indicate whether the statement is true or false.
1. Resources consist of labor and natural resources.
True
False


ANSWER: False




2. The ceteris paribus assumption is the other-things-constant assumption.
True
False


ANSWER: True
3. Scarcity occurs when the amount people desire is less than the amount available at a
zero price.
True
False


ANSWER: False
4. Resources are used only in the production of goods, not services.
True
False


ANSWER: False
5. "There should be less discrimination against women" is an example of a positive
economic statement.


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True
False


ANSWER: False
6. College graduates with history or literature as their major tend to earn more than those
who choose more quantitative disciplines like economics.
True
False


ANSWER: False
7. The fallacy of composition is the error of believing that a cause-and-effect relationship
exists between two events that are associated in time.
True
False


ANSWER: False




ANSWER: False
9. Rational self-interest is equivalent to pure selfishness.
True
False


ANSWER: False
10. "An increase in the price of cheese causes consumers to purchase more cheese" is an
example of a positive economic statement.
True
False


ANSWER: True
11. Labor and capital are exchanged in the resource market.

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True
False


ANSWER: True
12. Labor is the physical and mental effort used to produce goods and services.
True
False


ANSWER: True
13. An economist would classify 500 shares of stock in General Mills, Inc. as capital.
True
False


ANSWER: False
14. A good economic theory brings clarity to chaos.
True
False


ANSWER: True
15. The ceteris paribus assumption is a behavioral assumption.
True
False


ANSWER: False




ANSWER: True
17. Most economists consider a theory a good one if it predicts well.
True
False



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ANSWER: True
18. A rational individual would make charitable contributions only if such contributions
receive favorable tax treatment.
True
False


ANSWER: False
19. Economics is as much an art as it is a science.
True
False


ANSWER: True
20. Economic choice results from scarcity.
True
False


ANSWER: True
21. A rational decision maker compares the expected marginal cost to the expected
marginal benefit of any activity.
True
False


ANSWER: True
22. Most real economic choices involve small (or marginal) changes rather than all-or-
nothing decisions.
True
False


ANSWER: True
23. Profit is the payment made for land resources.
True

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