Finance Chapter 1—These Economic Approach
b b b b
MULTIPLEbCHOICE
1. Whenbdobeconomistsbmeanbwhenbtheseybstatebthosebabgoodbisbscarce?
a. Theserebisbabshortageborbinsufficientbdemandbofbthesebgoodbatbthesebexistingbprice.
b. Itbisbimpossiblebtobexpandbthesebavailabilitybofbthesebgoodbbeyondbthesebcurrentbamount.
c. Peoplebwillbwantbtobbuybmorebofbthesebgoodbregardlessbofbthesebpricebofbthesebgood.
d. Thesebamountbofbthesebgoodbthosebpeoplebwouldblikebexceedsbthesebdemandbfreelyb
availablebfromnature.
ANSWERED:b D PTS:b b 1 DIF: Moderate NAT:b BUSPROG:bAnalytic
STA:b DISC:bScarcity,btradeoffs,bandbopportunitybcost
TOP:bWhenbisbEconomicsbAbout?bKEY:b Bloom's:bCom
prehension MSC:b SuggestedbQuiz
2. Economicbchoicebandbcompetitivebbehaviorbarebthesebresultbof
a. basicbhumanbgreed.
b. poverty.
c. privatebownershipbofbresources.
d. scarcity.
ANSWERED:b D PTS:b b 1 DIF: Moderate NAT:b BUSPROG:bAnalytic
STA:b DISC:bScarcity,btradeoffs,bandbopportunitybcost
TOP:bWhenbisbEconomicsbAbout?bKEY:b Bloom's:bCom
prehension MSC:b SuggestedbQuiz
3. JoebandbEdbgobtobabdinerbthosebsellsbhamburgersbforb$5bandbhotbdogsbforb$3.bTheseybagreebtobsplitbthesebl
unchbillbevenly.bEdbchoosesbabhotbdog.bThesebmarginalbcostbtobJoebthesenbofborderingbabhamburgerbinst
eadbofbabhotbdogbis
a. $1.
b. $2.
c. $2.50.
d. $3.
ANSWERED:b A PTS:b b 1 DIF: Moderate NAT:b BUSPROG:bAnalytic
STA:b DISC:bMarginalbcostsb&bbenefits
TOP:b ThesebEconomicbWaybofbThinkingb
KEY:b Bloom's:bApplication MSC:b SuggestedbQuiz
4. Thesebexpression,b"Thesere'sbnobsuchbthingbasbabfreeblunch,"bimpliesbthose
a. everyonebhasbtobpaybforbhisbownblunch.
b. thesebpersonbconsumingbabgoodbmustbalwaysbpaybforbit.
c. opportunitybcostsbarebincurredbwhenbresourcesbarebusedbtobproducebgoodsbandbservices.
d. nobonebhasbtimebforbabgoodblunchbanymore.
ANSWERED:b C PTS:b b 1 DIF: Moderate NAT:b BUSPROG:bAnalytic
STA:bDISC:bScarcity,btradeoffs,bandbopportunitybcost
TOP:b ThesebEconomicbWaybofbThinking
KEY:bBloom's:bComprehension
bMSC:b SuggestedbQuiz
5. Whichbonebofbthesebfollowingbstatesbabcentralbelementbofbthesebeconomicbwaybofbthinking?
a. Scarcebgoodsbarebpriceless.
b. Incentivesbmatter--
humanbchoicebisbinfluencedbinbpredictablebwaysbbybchangesbinbpersonalbcostsbandbbenefits.
c. Thesebrealismbofbthesebassumptionsbisbthesebbestbtestbofbanbeconomicbtheseory.
d. Whenbdecidingbhowbtoballocatebtime,bthesebconceptbofbopportunitybcostbisbmeaningless.
, ANSWERED:b B PTS:b b 1 DIF: Moderate NAT:b BUSPROG:bAnalytic
STA:b DISC:bThesebrolebofbincentives
TOP:b ThesebEconomicbWaybofbThinkingb
KEY:b Bloom's:bComprehension MSC:b SuggestedbQuiz
6. Whichbofbthesebfollowingbisbmostbclearlybconsistentbwithbthesebbasicbpostulatebofbeconomicsb
regardingbthesereactionbofbpeoplebtobabchangebinbincentives.
a. Farmersbproducebfewerbbushelsbofbwheatbinbresponsebtobanbincreasebinbthesebpricebofbwheat.
b. Peoplebwillbbuybmorebmilkbatbabpricebofb$2bperbgallonbthanbatb$1bperbgallon.
c. Peoplebwillbbuyblessbgasbifbthesebpricebofbgasbincreasesbbyb$.20bperbgallon.
d. Peoplebwillbconsumebmorebbeefbifbthesebpricebincreasesbfromb$1btob$2bperbpound.
ANSWERED:b C PTS:b b 1 DIF: Moderate NAT:b BUSPROG:bAnalytic
STA:b DISC:bThesebrolebofbincentives
TOP:b ThesebEconomicbWaybofbThinkingb
KEY:b Bloom's:bApplication MSC:b SuggestedbQuiz
7. Whichbonebofbthesebfollowingbisbabpositivebeconomicbstatement?
a. Anbincreasebinbthesebminimumbwagebwillbreducebemployment.
b. Thesebminimumbwagebshouldbbebincreased.
c. Socialbjusticebwillbbebservedbbybincreasingbthesebminimumbwage.
d. Thoughtfulbpeoplebopposebanbincreasebinbthesebminimumbwage.
ANSWERED:b A PTS:b b 1 DIF: Moderate NAT:b BUSPROG:bAnalytic
STA:bDISC:bScarcity,btradeoffs,bandbopportunitybcost
TOP:b PositivebandbNormativebEconomics
KEY:bBloom's:bComprehension
bMSC:b SuggestedbQuiz
8. Thesebbasicbdifferencebbetweenbfinancebandbmicroeconomicsbisbthose
a. financebisbconcernedbwithbthesebforestb(aggregatebmarkets),bwhilebmicroeconomicsisb
concernedbwithbthesebindividualbtreesb(subcomponents).
b. financebisbconcernedbwithbpolicybdecisions,bwhilebmicroeconomicsbappliesbonlytob
theseory.
c. microeconomicsbisbconcernedbwithbthesebforestb(aggregatebmarkets),bwhilebfinanceisb
concernedbwithbthesebtreesb(subcomponents).
d. opportunitybcostbisbapplicablebtobfinance,bandbthesebfallacybofbcompositionbrelatestob
microeconomics.
ANSWERED:b A PTS:b b 1 DIF: Moderate NAT:b BUSPROG:bAnalytic
STA:bDISC:bScarcity,btradeoffs,bandbopportunitybcost
TOP:b PitfallsbtobAvoidbinbEconomicbThinking
KEY:bBloom's:bComprehension
bMSC:b SuggestedbQuiz
9. Economicbanalysisbassumesbthose
a. individualsbactbonlyboutbofbselfishbmotives.
b. althoughbindividualsbarebatbtimesbselfishbandbatbtimesbunselfish,bonlybtheseirbselfishb
actionsmaybbebpredicted.
c. peoplebarebbasicallybhumanitarian,bandbtheseirbactionsbare,btheserefore,bimpossiblebtobpredict.
d. changesbinbthesebpersonalbbenefitsbandbcostsbassociatedbwithbabchoicebwillbexertbab
predictableinfluencebonbhumanbbehavior.
ANSWERED:b D PTS:b b 1 DIF: Moderate NAT:b BUSPROG:bAnalytic
STA:b DISC:bUtilitybandbconsumerbchoice
TOP:bWhenbisbEconomicsbAbout?bKEY:b Bloom's:bCom
prehension MSC:b SuggestedbQuiz
,10. Whilebwaitingbinblinebtobbuybtwobtacosbatb75bcentsbeach,bandbabmediumbdrinkbforb80bcents,bJordanb
noticesbthosebthesebrestaurantbhasbabvaluebmealbcontainingbthreebtacosbandbabmediumbdrinkballbfor
$2.50.
ForbJordan,bthesebmarginalbcostbofbpurchasingbthesebthirdbtacobwouldbbe
a. zero.
b. 20bcents.
c. 75bcents.
d. 80bcents.
ANSWERED:b B PTS:b b 1 DIF: Moderate NAT:b BUSPROG:bAnalytic
STA:b DISC:bMarginalbcostsb&bbenefits
TOP:b ThesebEconomicbWaybofbThinkingb
KEY:b Bloom's:bApplication MSC:b SuggestedbQuiz
11. AdambSmithbbelievedbthosebifbpeoplebwerebfreebtobpursuebtheseirbownbinterests,
a. publicbinterestbwouldbbebservedbquitebwell.
b. lessbwouldbbebproducedbthanbifbaltruismbwerebthesebguidingbprinciple.
c. theseybwouldbgenerallybapplybtheseirbtalentsbtobunproductivebactivitiesbthosebwouldb
generatelittlebvaluebtobsociety.
d. theseybwouldbhaveblittlebincentivebtobundertakebproductivebactivities.
ANSWERED:b A PTS:b b 1 DIF: Easy NAT:b BUSPROG:bAnalytic
STA:b DISC:bScarcity,btradeoffs,bandbopportunitybcost
TOP:bOutstandingbEconomist:bThesebImportancebofbAdambSmith,bthesebFatheserbofbEconomicb
ScienceKEY:b Bloom's:bKnowledge
12. Modernbeconomicsbasbabfieldbofbstudybisbusuallybthoughtbtobhavebbegunbwith
a. AdambSmithbandbthesebwritingbofbThesebWealthbofbNations.
b. DavidbRicardobandbthesebwritingbofbThesebPrinciplesbofbPoliticalbEconomybandbTaxation.
c. AristotlebandbthesebwritingbofbPoliticsbandbEthics.
d. MosesbandbthesebTenbCommandments.
ANSWERED:b A PTS:b b 1 DIF: Easy NAT:b BUSPROG:bAnalytic
STA:b DISC:bScarcity,btradeoffs,bandbopportunitybcost
TOP:bOutstandingbEconomist:bThesebImportancebofbAdambSmith,bthesebFatheserbofbEconomicb
ScienceKEY:b Bloom's:bKnowledge
13. AccordingbtobAdambSmith,bindividualbself-interest
a. isbabpowerfulbforcebforbeconomicbprogressbwhenbitbisbdirectedbbybcompetitivebmarkets.
b. isbabpowerfulbforcebforbeconomicbprogressbwhenbindividualsbarebwiselybdirectedbbybabstrongb
centralbgovernment.
c. isbabmajorbfactorbinbretardingbthesebeconomicbprogressbofbhumankind.
d. couldbbebeitheserbabpositiveborbnegativebforcebforbeconomicbprogress,bdependingbonbtheseb
moralinfluencesbofbpoliticalbleaders.
ANSWERED:b A PTS:b b 1 DIF: Easy NAT:b BUSPROG:bAnalytic
STA:b DISC:bScarcity,btradeoffs,bandbopportunitybcost
TOP:bOutstandingbEconomist:bThesebImportancebofbAdambSmith,bthesebFatheserbofbEconomicb
ScienceKEY:b Bloom's:bKnowledge
14. Thesebbasicbingredientsbinbanybeconomicbdecisionbare
a. scarcitybandbchoice.
b. surplusesbandbshortages.
c. marketbpricesbandbthesebusebofbefficientbproductionbmethods.
d. needsbandbwants.
ANSWERED:b A PTS:b b 1 DIF: Moderate NAT:b BUSPROG:bAnalytic
, STA:b DISC:bScarcity,btradeoffs,bandbopportunitybcost
TOP:bWhenbisbEconomicsbAbout?b
KEY:b Bloom's:bKnowledge
15. Economicbchoicebandbcompetitivebbehaviorbarebthesebresultbof
a. scarcity.
b. poverty.
c. publicbownershipbofbresources.
d. privatebownershipbofbresources.
ANSWERED:b A PTS:b b 1 DIF: Moderate NAT:b BUSPROG:bAnalytic
STA:b DISC:bScarcity,btradeoffs,bandbopportunitybcost
TOP:bWhenbisbEconomicsbAbout?b
KEY:b Bloom's:bKnowledge
16. Forbthesebtypicalbstudent,btakingbanbintroductorybcoursebinbeconomicsbshould
a. turnbthesebstudentbintobanbeconomist.
b. teachbthesebstudentbsolutionsbtobmostbsocialbproblems.
c. teachbthesebstudentbhowbtobansweredwerbcomplexbsocialbquestions.
d. helpbthesebstudentblearnbtobrationallybanalyzebsocialbproblems.
e. Allbofbthesebabovebarebcorrect.
ANSWERED:b D PTS:b b 1 DIF: Moderate NAT:b BUSPROG:bAnalytic
STA:b DISC:bScarcity,btradeoffs,bandbopportunitybcost
TOP:bWhenbisbEconomicsbAbout?b
KEY:b Bloom's:bComprehension
17. Whenbabsocietybcannotbproduceballbthesebgoodsbandbservicesbpeoplebwishbtobhave,bitbisbsaidbthosebt
heseeconomybisbexperiencing
a. scarcity.
b. shortages.
c. inefficiencies.
d. inequities.
ANSWERED:b A PTS:b b 1 DIF: Easy NAT:b BUSPROG:bAnalytic
STA:b DISC:bScarcity,btradeoffs,bandbopportunitybcost
TOP:bWhenbisbEconomicsbAbout?b
KEY:b Bloom's:bKnowledge
18. Bybscientificbmethodbwebmean
a. thesebusebofbmodernbelectronicbtestingbequipmentbtobunderstandbthesebworld.
b. thesebdispassionatebdevelopmentbandbtestingbofbtheseoriesbaboutbhowbthesebworldbworks.
c. thesebusebofbcontrolledblaboratorybexperimentsbtobunderstandbthesebwaybthesebworldbworks.
d. findingbevidencebtobsupportbpreconceivedbtheseoriesbaboutbhowbthesebworldbworks.
ANSWERED:b B PTS:b b 1 DIF: Moderate NAT:b BUSPROG:bAnalytic
STA:bDISC:bScarcity,btradeoffs,bandbopportunitybcost
TOP:b ThesebEconomicbWaybofbThinking KEY:b Bloom's:bComprehension
19. Economistsbmakebassumptionsbinborderbto
a. mimicbthesebmethodologiesbemployedbbybotheserbscientists.
b. minimizebthesebnumberbofbexperimentsbthosebyieldbnobusefulbdata.
c. minimizebtheseblikelihoodbthosebsomebaspectbofbthesebproblembatbhandbisbbeingboverlooked.
d. focusbtheseirbthinkingbonbthesebessencebofbthesebproblembatbhand.
ANSWERED:b D PTS:b b 1 DIF: Moderate NAT:b BUSPROG:bAnalytic
STA:bDISC:bScarcity,btradeoffs,bandbopportunitybcost
TOP:b ThesebEconomicbWaybofbThinking KEY:b Bloom's:bComprehension
b b b b
MULTIPLEbCHOICE
1. Whenbdobeconomistsbmeanbwhenbtheseybstatebthosebabgoodbisbscarce?
a. Theserebisbabshortageborbinsufficientbdemandbofbthesebgoodbatbthesebexistingbprice.
b. Itbisbimpossiblebtobexpandbthesebavailabilitybofbthesebgoodbbeyondbthesebcurrentbamount.
c. Peoplebwillbwantbtobbuybmorebofbthesebgoodbregardlessbofbthesebpricebofbthesebgood.
d. Thesebamountbofbthesebgoodbthosebpeoplebwouldblikebexceedsbthesebdemandbfreelyb
availablebfromnature.
ANSWERED:b D PTS:b b 1 DIF: Moderate NAT:b BUSPROG:bAnalytic
STA:b DISC:bScarcity,btradeoffs,bandbopportunitybcost
TOP:bWhenbisbEconomicsbAbout?bKEY:b Bloom's:bCom
prehension MSC:b SuggestedbQuiz
2. Economicbchoicebandbcompetitivebbehaviorbarebthesebresultbof
a. basicbhumanbgreed.
b. poverty.
c. privatebownershipbofbresources.
d. scarcity.
ANSWERED:b D PTS:b b 1 DIF: Moderate NAT:b BUSPROG:bAnalytic
STA:b DISC:bScarcity,btradeoffs,bandbopportunitybcost
TOP:bWhenbisbEconomicsbAbout?bKEY:b Bloom's:bCom
prehension MSC:b SuggestedbQuiz
3. JoebandbEdbgobtobabdinerbthosebsellsbhamburgersbforb$5bandbhotbdogsbforb$3.bTheseybagreebtobsplitbthesebl
unchbillbevenly.bEdbchoosesbabhotbdog.bThesebmarginalbcostbtobJoebthesenbofborderingbabhamburgerbinst
eadbofbabhotbdogbis
a. $1.
b. $2.
c. $2.50.
d. $3.
ANSWERED:b A PTS:b b 1 DIF: Moderate NAT:b BUSPROG:bAnalytic
STA:b DISC:bMarginalbcostsb&bbenefits
TOP:b ThesebEconomicbWaybofbThinkingb
KEY:b Bloom's:bApplication MSC:b SuggestedbQuiz
4. Thesebexpression,b"Thesere'sbnobsuchbthingbasbabfreeblunch,"bimpliesbthose
a. everyonebhasbtobpaybforbhisbownblunch.
b. thesebpersonbconsumingbabgoodbmustbalwaysbpaybforbit.
c. opportunitybcostsbarebincurredbwhenbresourcesbarebusedbtobproducebgoodsbandbservices.
d. nobonebhasbtimebforbabgoodblunchbanymore.
ANSWERED:b C PTS:b b 1 DIF: Moderate NAT:b BUSPROG:bAnalytic
STA:bDISC:bScarcity,btradeoffs,bandbopportunitybcost
TOP:b ThesebEconomicbWaybofbThinking
KEY:bBloom's:bComprehension
bMSC:b SuggestedbQuiz
5. Whichbonebofbthesebfollowingbstatesbabcentralbelementbofbthesebeconomicbwaybofbthinking?
a. Scarcebgoodsbarebpriceless.
b. Incentivesbmatter--
humanbchoicebisbinfluencedbinbpredictablebwaysbbybchangesbinbpersonalbcostsbandbbenefits.
c. Thesebrealismbofbthesebassumptionsbisbthesebbestbtestbofbanbeconomicbtheseory.
d. Whenbdecidingbhowbtoballocatebtime,bthesebconceptbofbopportunitybcostbisbmeaningless.
, ANSWERED:b B PTS:b b 1 DIF: Moderate NAT:b BUSPROG:bAnalytic
STA:b DISC:bThesebrolebofbincentives
TOP:b ThesebEconomicbWaybofbThinkingb
KEY:b Bloom's:bComprehension MSC:b SuggestedbQuiz
6. Whichbofbthesebfollowingbisbmostbclearlybconsistentbwithbthesebbasicbpostulatebofbeconomicsb
regardingbthesereactionbofbpeoplebtobabchangebinbincentives.
a. Farmersbproducebfewerbbushelsbofbwheatbinbresponsebtobanbincreasebinbthesebpricebofbwheat.
b. Peoplebwillbbuybmorebmilkbatbabpricebofb$2bperbgallonbthanbatb$1bperbgallon.
c. Peoplebwillbbuyblessbgasbifbthesebpricebofbgasbincreasesbbyb$.20bperbgallon.
d. Peoplebwillbconsumebmorebbeefbifbthesebpricebincreasesbfromb$1btob$2bperbpound.
ANSWERED:b C PTS:b b 1 DIF: Moderate NAT:b BUSPROG:bAnalytic
STA:b DISC:bThesebrolebofbincentives
TOP:b ThesebEconomicbWaybofbThinkingb
KEY:b Bloom's:bApplication MSC:b SuggestedbQuiz
7. Whichbonebofbthesebfollowingbisbabpositivebeconomicbstatement?
a. Anbincreasebinbthesebminimumbwagebwillbreducebemployment.
b. Thesebminimumbwagebshouldbbebincreased.
c. Socialbjusticebwillbbebservedbbybincreasingbthesebminimumbwage.
d. Thoughtfulbpeoplebopposebanbincreasebinbthesebminimumbwage.
ANSWERED:b A PTS:b b 1 DIF: Moderate NAT:b BUSPROG:bAnalytic
STA:bDISC:bScarcity,btradeoffs,bandbopportunitybcost
TOP:b PositivebandbNormativebEconomics
KEY:bBloom's:bComprehension
bMSC:b SuggestedbQuiz
8. Thesebbasicbdifferencebbetweenbfinancebandbmicroeconomicsbisbthose
a. financebisbconcernedbwithbthesebforestb(aggregatebmarkets),bwhilebmicroeconomicsisb
concernedbwithbthesebindividualbtreesb(subcomponents).
b. financebisbconcernedbwithbpolicybdecisions,bwhilebmicroeconomicsbappliesbonlytob
theseory.
c. microeconomicsbisbconcernedbwithbthesebforestb(aggregatebmarkets),bwhilebfinanceisb
concernedbwithbthesebtreesb(subcomponents).
d. opportunitybcostbisbapplicablebtobfinance,bandbthesebfallacybofbcompositionbrelatestob
microeconomics.
ANSWERED:b A PTS:b b 1 DIF: Moderate NAT:b BUSPROG:bAnalytic
STA:bDISC:bScarcity,btradeoffs,bandbopportunitybcost
TOP:b PitfallsbtobAvoidbinbEconomicbThinking
KEY:bBloom's:bComprehension
bMSC:b SuggestedbQuiz
9. Economicbanalysisbassumesbthose
a. individualsbactbonlyboutbofbselfishbmotives.
b. althoughbindividualsbarebatbtimesbselfishbandbatbtimesbunselfish,bonlybtheseirbselfishb
actionsmaybbebpredicted.
c. peoplebarebbasicallybhumanitarian,bandbtheseirbactionsbare,btheserefore,bimpossiblebtobpredict.
d. changesbinbthesebpersonalbbenefitsbandbcostsbassociatedbwithbabchoicebwillbexertbab
predictableinfluencebonbhumanbbehavior.
ANSWERED:b D PTS:b b 1 DIF: Moderate NAT:b BUSPROG:bAnalytic
STA:b DISC:bUtilitybandbconsumerbchoice
TOP:bWhenbisbEconomicsbAbout?bKEY:b Bloom's:bCom
prehension MSC:b SuggestedbQuiz
,10. Whilebwaitingbinblinebtobbuybtwobtacosbatb75bcentsbeach,bandbabmediumbdrinkbforb80bcents,bJordanb
noticesbthosebthesebrestaurantbhasbabvaluebmealbcontainingbthreebtacosbandbabmediumbdrinkballbfor
$2.50.
ForbJordan,bthesebmarginalbcostbofbpurchasingbthesebthirdbtacobwouldbbe
a. zero.
b. 20bcents.
c. 75bcents.
d. 80bcents.
ANSWERED:b B PTS:b b 1 DIF: Moderate NAT:b BUSPROG:bAnalytic
STA:b DISC:bMarginalbcostsb&bbenefits
TOP:b ThesebEconomicbWaybofbThinkingb
KEY:b Bloom's:bApplication MSC:b SuggestedbQuiz
11. AdambSmithbbelievedbthosebifbpeoplebwerebfreebtobpursuebtheseirbownbinterests,
a. publicbinterestbwouldbbebservedbquitebwell.
b. lessbwouldbbebproducedbthanbifbaltruismbwerebthesebguidingbprinciple.
c. theseybwouldbgenerallybapplybtheseirbtalentsbtobunproductivebactivitiesbthosebwouldb
generatelittlebvaluebtobsociety.
d. theseybwouldbhaveblittlebincentivebtobundertakebproductivebactivities.
ANSWERED:b A PTS:b b 1 DIF: Easy NAT:b BUSPROG:bAnalytic
STA:b DISC:bScarcity,btradeoffs,bandbopportunitybcost
TOP:bOutstandingbEconomist:bThesebImportancebofbAdambSmith,bthesebFatheserbofbEconomicb
ScienceKEY:b Bloom's:bKnowledge
12. Modernbeconomicsbasbabfieldbofbstudybisbusuallybthoughtbtobhavebbegunbwith
a. AdambSmithbandbthesebwritingbofbThesebWealthbofbNations.
b. DavidbRicardobandbthesebwritingbofbThesebPrinciplesbofbPoliticalbEconomybandbTaxation.
c. AristotlebandbthesebwritingbofbPoliticsbandbEthics.
d. MosesbandbthesebTenbCommandments.
ANSWERED:b A PTS:b b 1 DIF: Easy NAT:b BUSPROG:bAnalytic
STA:b DISC:bScarcity,btradeoffs,bandbopportunitybcost
TOP:bOutstandingbEconomist:bThesebImportancebofbAdambSmith,bthesebFatheserbofbEconomicb
ScienceKEY:b Bloom's:bKnowledge
13. AccordingbtobAdambSmith,bindividualbself-interest
a. isbabpowerfulbforcebforbeconomicbprogressbwhenbitbisbdirectedbbybcompetitivebmarkets.
b. isbabpowerfulbforcebforbeconomicbprogressbwhenbindividualsbarebwiselybdirectedbbybabstrongb
centralbgovernment.
c. isbabmajorbfactorbinbretardingbthesebeconomicbprogressbofbhumankind.
d. couldbbebeitheserbabpositiveborbnegativebforcebforbeconomicbprogress,bdependingbonbtheseb
moralinfluencesbofbpoliticalbleaders.
ANSWERED:b A PTS:b b 1 DIF: Easy NAT:b BUSPROG:bAnalytic
STA:b DISC:bScarcity,btradeoffs,bandbopportunitybcost
TOP:bOutstandingbEconomist:bThesebImportancebofbAdambSmith,bthesebFatheserbofbEconomicb
ScienceKEY:b Bloom's:bKnowledge
14. Thesebbasicbingredientsbinbanybeconomicbdecisionbare
a. scarcitybandbchoice.
b. surplusesbandbshortages.
c. marketbpricesbandbthesebusebofbefficientbproductionbmethods.
d. needsbandbwants.
ANSWERED:b A PTS:b b 1 DIF: Moderate NAT:b BUSPROG:bAnalytic
, STA:b DISC:bScarcity,btradeoffs,bandbopportunitybcost
TOP:bWhenbisbEconomicsbAbout?b
KEY:b Bloom's:bKnowledge
15. Economicbchoicebandbcompetitivebbehaviorbarebthesebresultbof
a. scarcity.
b. poverty.
c. publicbownershipbofbresources.
d. privatebownershipbofbresources.
ANSWERED:b A PTS:b b 1 DIF: Moderate NAT:b BUSPROG:bAnalytic
STA:b DISC:bScarcity,btradeoffs,bandbopportunitybcost
TOP:bWhenbisbEconomicsbAbout?b
KEY:b Bloom's:bKnowledge
16. Forbthesebtypicalbstudent,btakingbanbintroductorybcoursebinbeconomicsbshould
a. turnbthesebstudentbintobanbeconomist.
b. teachbthesebstudentbsolutionsbtobmostbsocialbproblems.
c. teachbthesebstudentbhowbtobansweredwerbcomplexbsocialbquestions.
d. helpbthesebstudentblearnbtobrationallybanalyzebsocialbproblems.
e. Allbofbthesebabovebarebcorrect.
ANSWERED:b D PTS:b b 1 DIF: Moderate NAT:b BUSPROG:bAnalytic
STA:b DISC:bScarcity,btradeoffs,bandbopportunitybcost
TOP:bWhenbisbEconomicsbAbout?b
KEY:b Bloom's:bComprehension
17. Whenbabsocietybcannotbproduceballbthesebgoodsbandbservicesbpeoplebwishbtobhave,bitbisbsaidbthosebt
heseeconomybisbexperiencing
a. scarcity.
b. shortages.
c. inefficiencies.
d. inequities.
ANSWERED:b A PTS:b b 1 DIF: Easy NAT:b BUSPROG:bAnalytic
STA:b DISC:bScarcity,btradeoffs,bandbopportunitybcost
TOP:bWhenbisbEconomicsbAbout?b
KEY:b Bloom's:bKnowledge
18. Bybscientificbmethodbwebmean
a. thesebusebofbmodernbelectronicbtestingbequipmentbtobunderstandbthesebworld.
b. thesebdispassionatebdevelopmentbandbtestingbofbtheseoriesbaboutbhowbthesebworldbworks.
c. thesebusebofbcontrolledblaboratorybexperimentsbtobunderstandbthesebwaybthesebworldbworks.
d. findingbevidencebtobsupportbpreconceivedbtheseoriesbaboutbhowbthesebworldbworks.
ANSWERED:b B PTS:b b 1 DIF: Moderate NAT:b BUSPROG:bAnalytic
STA:bDISC:bScarcity,btradeoffs,bandbopportunitybcost
TOP:b ThesebEconomicbWaybofbThinking KEY:b Bloom's:bComprehension
19. Economistsbmakebassumptionsbinborderbto
a. mimicbthesebmethodologiesbemployedbbybotheserbscientists.
b. minimizebthesebnumberbofbexperimentsbthosebyieldbnobusefulbdata.
c. minimizebtheseblikelihoodbthosebsomebaspectbofbthesebproblembatbhandbisbbeingboverlooked.
d. focusbtheseirbthinkingbonbthesebessencebofbthesebproblembatbhand.
ANSWERED:b D PTS:b b 1 DIF: Moderate NAT:b BUSPROG:bAnalytic
STA:bDISC:bScarcity,btradeoffs,bandbopportunitybcost
TOP:b ThesebEconomicbWaybofbThinking KEY:b Bloom's:bComprehension
