TEST BANK FOR ECON MICRO 7th Edition by William A. McEachern & Veronika Dolar , ISBN: 9780357901960 ||Complete Guide A+

TEST BANK
Test Bank for ECON MICRO, 7th Edition


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Page 1

, William A.: Econ Micro
Chapter 01

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

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

ANSWER: False
A
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




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,Name: Class: Date:

Chapter 01 ECON Micro7e

8. A marginal adjustment refers only to a minor change.
a. True
b. 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
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ANSWER: True

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

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

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, Name: Class: Date:

Chapter 01 ECON Micro7e

16. It is always rational to acquire more information before making a decision.
a. True
b. False

ANSWER: True

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

ANSWER: True

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

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

20. Economic choice results from scarcity.
U
True
False
A
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
False

ANSWER: False

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