Finance Chapter 1—These Economic Approach
n n n n
MULTIPLEnCHOICE
1. Whenndoneconomistsnmeannwhenntheseynstatenthosenangoodnisnscarce?
a. Theserenisnanshortagenorninsufficientndemandnofnthesengoodnatnthesenexistingnprice.
b. Itnisnimpossiblentonexpandnthesenavailabilitynofnthesengoodnbeyondnthesencurrentnamount.
c. Peoplenwillnwantntonbuynmorenofnthesengoodnregardlessnofnthesenpricenofnthesengood.
d. Thesenamountnofnthesengoodnthosenpeoplenwouldnlikenexceedsnthesendemandnfreelyn
availablenfromnature.
ANSWERED:n D PTS:nnn 1 DIF: Moderate NAT:n BUSPROG:nAnalytic
STA:n DISC:nScarcity,ntradeoffs,nandnopportunityncost
TOP:nWhennisnEconomicsnAbout?nKEY:n Bloom's:nCom
prehension MSC:n SuggestednQuiz
2. Economicnchoicenandncompetitivenbehaviornarenthesenresultnof
a. basicnhumanngreed.
b. poverty.
c. privatenownershipnofnresources.
d. scarcity.
ANSWERED:n D PTS:nnn 1 DIF: Moderate NAT:n BUSPROG:nAnalytic
STA:n DISC:nScarcity,ntradeoffs,nandnopportunityncost
TOP:nWhennisnEconomicsnAbout?nKEY:n Bloom's:nCom
prehension MSC:n SuggestednQuiz
3. JoenandnEdngontonandinernthosensellsnhamburgersnforn$5nandnhotndogsnforn$3.nTheseynagreentonsplitnthesenl
unchbillnevenly.nEdnchoosesnanhotndog.nThesenmarginalncostntonJoenthesennofnorderingnanhamburgerninst
eadnofnanhotndognis
a. $1.
b.nnn $2.
c. $2.50.
d.n $3.
ANSWERED:n A PTS:nnn 1 DIF: Moderate NAT:nBUSPROG:nAnalytic
STA:n DISC:nMarginalncostsn&nbenefits
TOP:n ThesenEconomicnWaynofnThinkingn
KEY:n Bloom's:nApplication MSC:n SuggestednQuiz
4. Thesenexpression,n"Thesere'snnonsuchnthingnasnanfreenlunch,"nimpliesnthose
a. everyonenhasntonpaynfornhisnownnlunch.
b. thesenpersonnconsumingnangoodnmustnalwaysnpaynfornit.
c. opportunityncostsnarenincurrednwhennresourcesnarenusedntonproducengoodsnandnservices.
d. nononenhasntimenfornangoodnlunchnanymore.
ANSWERED:n C PTS:nnn 1 DIF: Moderate NAT:nBUSPROG:nAnalytic
STA:nDISC:nScarcity,ntradeoffs,nandnopportunityncost
TOP:n ThesenEconomicnWaynofnThinking
KEY:n Bloom's:nComprehensionn
MSC:n SuggestednQuiz
5. Whichnonenofnthesenfollowingnstatesnancentralnelementnofntheseneconomicnwaynofnthinking?
a. Scarcengoodsnarenpriceless.
b. Incentivesnmatter--
humannchoicenisninfluencedninnpredictablenwaysnbynchangesninnpersonalncostsnandnbenefits.
c. Thesenrealismnofnthesenassumptionsnisnthesenbestntestnofnanneconomicntheseory.
d. Whenndecidingnhowntonallocatentime,nthesenconceptnofnopportunityncostnisnmeaningless.
, ANSWERED:n B PTS:nnn 1 DIF: Moderate NAT:nBUSPROG:nAnalytic
STA:n DISC:nThesenrolenofnincentives
TOP:n ThesenEconomicnWaynofnThinkingn
KEY:n Bloom's:nComprehension MSC:n SuggestednQuiz
6. Whichnofnthesenfollowingnisnmostnclearlynconsistentnwithnthesenbasicnpostulatenofneconomicsnr
egardingnthesereactionnofnpeoplentonanchangeninnincentives.
a. Farmersnproducenfewernbushelsnofnwheatninnresponsentonannincreaseninnthesenpricenofnwheat.
b. Peoplenwillnbuynmorenmilknatnanpricenofn$2nperngallonnthannatn$1nperngallon.
c. Peoplenwillnbuynlessngasnifnthesenpricenofngasnincreasesnbyn$.20nperngallon.
d. Peoplenwillnconsumenmorenbeefnifnthesenpricenincreasesnfromn$1nton$2npernpound.
ANSWERED:n C PTS:nnn 1 DIF: Moderate NAT:nBUSPROG:nAnalytic
STA:n DISC:nThesenrolenofnincentives
TOP:n ThesenEconomicnWaynofnThinkingn
KEY:n Bloom's:nApplication MSC:n SuggestednQuiz
7. Whichnonenofnthesenfollowingnisnanpositiveneconomicnstatement?
a. Annincreaseninnthesenminimumnwagenwillnreducenemployment.
b. Thesenminimumnwagenshouldnbenincreased.
c. Socialnjusticenwillnbenservednbynincreasingnthesenminimumnwage.
d. Thoughtfulnpeoplenopposenannincreaseninnthesenminimumnwage.
ANSWERED:n A PTS:nnn 1 DIF: Moderate NAT:nBUSPROG:nAnalytic
STA:nDISC:nScarcity,ntradeoffs,nandnopportunityncost
TOP:n PositivenandnNormativenEconomics
KEY:nBloom's:nComprehensionn
MSC:n SuggestednQuiz
8. Thesenbasicndifferencenbetweennfinancenandnmicroeconomicsnisnthose
a. financenisnconcernednwithnthesenforestn(aggregatenmarkets),nwhilenmicroeconomicsisn
concernednwithnthesenindividualntreesn(subcomponents).
b. financenisnconcernednwithnpolicyndecisions,nwhilenmicroeconomicsnappliesnonlytont
heseory.
c. microeconomicsnisnconcernednwithnthesenforestn(aggregatenmarkets),nwhilenfinanceisn
concernednwithnthesentreesn(subcomponents).
d. opportunityncostnisnapplicablentonfinance,nandnthesenfallacynofncompositionnrelateston
microeconomics.
ANSWERED:n A PTS:nnn 1 DIF: Moderate NAT:nBUSPROG:nAnalytic
STA:nDISC:nScarcity,ntradeoffs,nandnopportunityncost
TOP:n PitfallsntonAvoidninnEconomicnThinking
KEY:nBloom's:nComprehensionn
MSC:n SuggestednQuiz
9. Economicnanalysisnassumesnthose
a. individualsnactnonlynoutnofnselfishnmotives.
b. althoughnindividualsnarenatntimesnselfishnandnatntimesnunselfish,nonlyntheseirnselfishn
actionsmaynbenpredicted.
c. peoplenarenbasicallynhumanitarian,nandntheseirnactionsnare,ntheserefore,nimpossiblentonpredict.
d. changesninnthesenpersonalnbenefitsnandncostsnassociatednwithnanchoicenwillnexertnan
predictableinfluencenonnhumannbehavior.
ANSWERED:n D PTS:nnn 1 DIF: Moderate NAT:n BUSPROG:nAnalytic
STA:n DISC:nUtilitynandnconsumernchoice
TOP:nWhennisnEconomicsnAbout?nKEY:n Bloom's:nCom
prehension MSC:n SuggestednQuiz
,10. Whilenwaitingninnlinentonbuyntwontacosnatn75ncentsneach,nandnanmediumndrinknforn80ncents,nJordannn
oticesnthosenthesenrestaurantnhasnanvaluenmealncontainingnthreentacosnandnanmediumndrinknallnfor
$2.50.
FornJordan,nthesenmarginalncostnofnpurchasingnthesenthirdntaconwouldnbe
a. zero.
b. 20ncents.
c. 75ncents.
d. 80ncents.
ANSWERED:n B PTS:nnn 1 DIF: Moderate NAT:nBUSPROG:nAnalytic
STA:n DISC:nMarginalncostsn&nbenefits
TOP:n ThesenEconomicnWaynofnThinkingn
KEY:n Bloom's:nApplication MSC:n SuggestednQuiz
11. AdamnSmithnbelievednthosenifnpeoplenwerenfreentonpursuentheseirnownninterests,
a. publicninterestnwouldnbenservednquitenwell.
b. lessnwouldnbenproducednthannifnaltruismnwerenthesenguidingnprinciple.
c. theseynwouldngenerallynapplyntheseirntalentsntonunproductivenactivitiesnthosenwouldn
generatelittlenvaluentonsociety.
d. theseynwouldnhavenlittlenincentiventonundertakenproductivenactivities.
ANSWERED:n A PTS:nnn 1 DIF: Easy NAT:n BUSPROG:nAnalytic
STA:n DISC:nScarcity,ntradeoffs,nandnopportunityncost
TOP:nOutstandingnEconomist:nThesenImportancenofnAdamnSmith,nthesenFathesernofnEconomicnS
cienceKEY:n Bloom's:nKnowledge
12. Modernneconomicsnasnanfieldnofnstudynisnusuallynthoughtntonhavenbegunnwith
a. AdamnSmithnandnthesenwritingnofnThesenWealthnofnNations.
b. DavidnRicardonandnthesenwritingnofnThesenPrinciplesnofnPoliticalnEconomynandnTaxation.
c. AristotlenandnthesenwritingnofnPoliticsnandnEthics.
d. MosesnandnthesenTennCommandments.
ANSWERED:n A PTS:nnn 1 DIF: Easy NAT:n BUSPROG:nAnalytic
STA:n DISC:nScarcity,ntradeoffs,nandnopportunityncost
TOP:nOutstandingnEconomist:nThesenImportancenofnAdamnSmith,nthesenFathesernofnEconomicnS
cienceKEY:n Bloom's:nKnowledge
13. AccordingntonAdamnSmith,nindividualnself-interest
a. isnanpowerfulnforcenforneconomicnprogressnwhennitnisndirectednbyncompetitivenmarkets.
b. isnanpowerfulnforcenforneconomicnprogressnwhennindividualsnarenwiselyndirectednbynanstrongnc
entralngovernment.
c. isnanmajornfactorninnretardingntheseneconomicnprogressnofnhumankind.
d. couldnbeneithesernanpositivenornnegativenforcenforneconomicnprogress,ndependingnonnthesen
moralinfluencesnofnpoliticalnleaders.
ANSWERED:n A PTS:nnn 1 DIF: Easy NAT:n BUSPROG:nAnalytic
STA:n DISC:nScarcity,ntradeoffs,nandnopportunityncost
TOP:nOutstandingnEconomist:nThesenImportancenofnAdamnSmith,nthesenFathesernofnEconomicnS
cienceKEY:n Bloom's:nKnowledge
14. Thesenbasicningredientsninnanyneconomicndecisionnare
a. scarcitynandnchoice.
b. surplusesnandnshortages.
c. marketnpricesnandnthesenusenofnefficientnproductionnmethods.
d. needsnandnwants.
ANSWERED:n A PTS:nnn 1 DIF: Moderate NAT:n BUSPROG:nAnalytic
, STA:n DISC:nScarcity,ntradeoffs,nandnopportunityncost
TOP:nWhennisnEconomicsnAbout?n
KEY:n Bloom's:nKnowledge
15. Economicnchoicenandncompetitivenbehaviornarenthesenresultnof
a. scarcity.
b. poverty.
c. publicnownershipnofnresources.
d. privatenownershipnofnresources.
ANSWERED:n A PTS:nnn 1 DIF: Moderate NAT:n BUSPROG:nAnalytic
STA:n DISC:nScarcity,ntradeoffs,nandnopportunityncost
TOP:nWhennisnEconomicsnAbout?n
KEY:n Bloom's:nKnowledge
16. Fornthesentypicalnstudent,ntakingnannintroductoryncourseninneconomicsnshould
a. turnnthesenstudentnintonanneconomist.
b. teachnthesenstudentnsolutionsntonmostnsocialnproblems.
c. teachnthesenstudentnhowntonansweredwerncomplexnsocialnquestions.
d. helpnthesenstudentnlearnntonrationallynanalyzensocialnproblems.
e. Allnofnthesenabovenarencorrect.
ANSWERED:n D PTS:nnn 1 DIF: Moderate NAT:n BUSPROG:nAnalytic
STA:n DISC:nScarcity,ntradeoffs,nandnopportunityncost
TOP:nWhennisnEconomicsnAbout?n
KEY:n Bloom's:nComprehension
17. Whennansocietyncannotnproducenallnthesengoodsnandnservicesnpeoplenwishntonhave,nitnisnsaidnthosent
heseeconomynisnexperiencing
a. scarcity.
b. shortages.
c. inefficiencies.
d. inequities.
ANSWERED:n A PTS:nnn 1 DIF: Easy NAT:n BUSPROG:nAnalytic
STA:n DISC:nScarcity,ntradeoffs,nandnopportunityncost
TOP:nWhennisnEconomicsnAbout?n
KEY:n Bloom's:nKnowledge
18. Bynscientificnmethodnwenmean
a. thesenusenofnmodernnelectronicntestingnequipmentntonunderstandnthesenworld.
b. thesendispassionatendevelopmentnandntestingnofntheseoriesnaboutnhownthesenworldnworks.
c. thesenusenofncontrollednlaboratorynexperimentsntonunderstandnthesenwaynthesenworldnworks.
d. findingnevidencentonsupportnpreconceivedntheseoriesnaboutnhownthesenworldnworks.
ANSWERED:n B PTS:nnn 1 DIF: Moderate NAT:nBUSPROG:nAnalytic
STA:nDISC:nScarcity,ntradeoffs,nandnopportunityncost
TOP:n ThesenEconomicnWaynofnThinking KEY:n Bloom's:nComprehension
19. Economistsnmakenassumptionsninnordernto
a. mimicnthesenmethodologiesnemployednbynothesernscientists.
b. minimizenthesennumbernofnexperimentsnthosenyieldnnonusefulndata.
c. minimizenthesenlikelihoodnthosensomenaspectnofnthesenproblemnatnhandnisnbeingnoverlooked.
d. focusntheseirnthinkingnonnthesenessencenofnthesenproblemnatnhand.
ANSWERED:n D PTS:nnn 1 DIF: Moderate NAT:nBUSPROG:nAnalytic
STA:nDISC:nScarcity,ntradeoffs,nandnopportunityncost
TOP:n ThesenEconomicnWaynofnThinking KEY:n Bloom's:nComprehension
n n n n
MULTIPLEnCHOICE
1. Whenndoneconomistsnmeannwhenntheseynstatenthosenangoodnisnscarce?
a. Theserenisnanshortagenorninsufficientndemandnofnthesengoodnatnthesenexistingnprice.
b. Itnisnimpossiblentonexpandnthesenavailabilitynofnthesengoodnbeyondnthesencurrentnamount.
c. Peoplenwillnwantntonbuynmorenofnthesengoodnregardlessnofnthesenpricenofnthesengood.
d. Thesenamountnofnthesengoodnthosenpeoplenwouldnlikenexceedsnthesendemandnfreelyn
availablenfromnature.
ANSWERED:n D PTS:nnn 1 DIF: Moderate NAT:n BUSPROG:nAnalytic
STA:n DISC:nScarcity,ntradeoffs,nandnopportunityncost
TOP:nWhennisnEconomicsnAbout?nKEY:n Bloom's:nCom
prehension MSC:n SuggestednQuiz
2. Economicnchoicenandncompetitivenbehaviornarenthesenresultnof
a. basicnhumanngreed.
b. poverty.
c. privatenownershipnofnresources.
d. scarcity.
ANSWERED:n D PTS:nnn 1 DIF: Moderate NAT:n BUSPROG:nAnalytic
STA:n DISC:nScarcity,ntradeoffs,nandnopportunityncost
TOP:nWhennisnEconomicsnAbout?nKEY:n Bloom's:nCom
prehension MSC:n SuggestednQuiz
3. JoenandnEdngontonandinernthosensellsnhamburgersnforn$5nandnhotndogsnforn$3.nTheseynagreentonsplitnthesenl
unchbillnevenly.nEdnchoosesnanhotndog.nThesenmarginalncostntonJoenthesennofnorderingnanhamburgerninst
eadnofnanhotndognis
a. $1.
b.nnn $2.
c. $2.50.
d.n $3.
ANSWERED:n A PTS:nnn 1 DIF: Moderate NAT:nBUSPROG:nAnalytic
STA:n DISC:nMarginalncostsn&nbenefits
TOP:n ThesenEconomicnWaynofnThinkingn
KEY:n Bloom's:nApplication MSC:n SuggestednQuiz
4. Thesenexpression,n"Thesere'snnonsuchnthingnasnanfreenlunch,"nimpliesnthose
a. everyonenhasntonpaynfornhisnownnlunch.
b. thesenpersonnconsumingnangoodnmustnalwaysnpaynfornit.
c. opportunityncostsnarenincurrednwhennresourcesnarenusedntonproducengoodsnandnservices.
d. nononenhasntimenfornangoodnlunchnanymore.
ANSWERED:n C PTS:nnn 1 DIF: Moderate NAT:nBUSPROG:nAnalytic
STA:nDISC:nScarcity,ntradeoffs,nandnopportunityncost
TOP:n ThesenEconomicnWaynofnThinking
KEY:n Bloom's:nComprehensionn
MSC:n SuggestednQuiz
5. Whichnonenofnthesenfollowingnstatesnancentralnelementnofntheseneconomicnwaynofnthinking?
a. Scarcengoodsnarenpriceless.
b. Incentivesnmatter--
humannchoicenisninfluencedninnpredictablenwaysnbynchangesninnpersonalncostsnandnbenefits.
c. Thesenrealismnofnthesenassumptionsnisnthesenbestntestnofnanneconomicntheseory.
d. Whenndecidingnhowntonallocatentime,nthesenconceptnofnopportunityncostnisnmeaningless.
, ANSWERED:n B PTS:nnn 1 DIF: Moderate NAT:nBUSPROG:nAnalytic
STA:n DISC:nThesenrolenofnincentives
TOP:n ThesenEconomicnWaynofnThinkingn
KEY:n Bloom's:nComprehension MSC:n SuggestednQuiz
6. Whichnofnthesenfollowingnisnmostnclearlynconsistentnwithnthesenbasicnpostulatenofneconomicsnr
egardingnthesereactionnofnpeoplentonanchangeninnincentives.
a. Farmersnproducenfewernbushelsnofnwheatninnresponsentonannincreaseninnthesenpricenofnwheat.
b. Peoplenwillnbuynmorenmilknatnanpricenofn$2nperngallonnthannatn$1nperngallon.
c. Peoplenwillnbuynlessngasnifnthesenpricenofngasnincreasesnbyn$.20nperngallon.
d. Peoplenwillnconsumenmorenbeefnifnthesenpricenincreasesnfromn$1nton$2npernpound.
ANSWERED:n C PTS:nnn 1 DIF: Moderate NAT:nBUSPROG:nAnalytic
STA:n DISC:nThesenrolenofnincentives
TOP:n ThesenEconomicnWaynofnThinkingn
KEY:n Bloom's:nApplication MSC:n SuggestednQuiz
7. Whichnonenofnthesenfollowingnisnanpositiveneconomicnstatement?
a. Annincreaseninnthesenminimumnwagenwillnreducenemployment.
b. Thesenminimumnwagenshouldnbenincreased.
c. Socialnjusticenwillnbenservednbynincreasingnthesenminimumnwage.
d. Thoughtfulnpeoplenopposenannincreaseninnthesenminimumnwage.
ANSWERED:n A PTS:nnn 1 DIF: Moderate NAT:nBUSPROG:nAnalytic
STA:nDISC:nScarcity,ntradeoffs,nandnopportunityncost
TOP:n PositivenandnNormativenEconomics
KEY:nBloom's:nComprehensionn
MSC:n SuggestednQuiz
8. Thesenbasicndifferencenbetweennfinancenandnmicroeconomicsnisnthose
a. financenisnconcernednwithnthesenforestn(aggregatenmarkets),nwhilenmicroeconomicsisn
concernednwithnthesenindividualntreesn(subcomponents).
b. financenisnconcernednwithnpolicyndecisions,nwhilenmicroeconomicsnappliesnonlytont
heseory.
c. microeconomicsnisnconcernednwithnthesenforestn(aggregatenmarkets),nwhilenfinanceisn
concernednwithnthesentreesn(subcomponents).
d. opportunityncostnisnapplicablentonfinance,nandnthesenfallacynofncompositionnrelateston
microeconomics.
ANSWERED:n A PTS:nnn 1 DIF: Moderate NAT:nBUSPROG:nAnalytic
STA:nDISC:nScarcity,ntradeoffs,nandnopportunityncost
TOP:n PitfallsntonAvoidninnEconomicnThinking
KEY:nBloom's:nComprehensionn
MSC:n SuggestednQuiz
9. Economicnanalysisnassumesnthose
a. individualsnactnonlynoutnofnselfishnmotives.
b. althoughnindividualsnarenatntimesnselfishnandnatntimesnunselfish,nonlyntheseirnselfishn
actionsmaynbenpredicted.
c. peoplenarenbasicallynhumanitarian,nandntheseirnactionsnare,ntheserefore,nimpossiblentonpredict.
d. changesninnthesenpersonalnbenefitsnandncostsnassociatednwithnanchoicenwillnexertnan
predictableinfluencenonnhumannbehavior.
ANSWERED:n D PTS:nnn 1 DIF: Moderate NAT:n BUSPROG:nAnalytic
STA:n DISC:nUtilitynandnconsumernchoice
TOP:nWhennisnEconomicsnAbout?nKEY:n Bloom's:nCom
prehension MSC:n SuggestednQuiz
,10. Whilenwaitingninnlinentonbuyntwontacosnatn75ncentsneach,nandnanmediumndrinknforn80ncents,nJordannn
oticesnthosenthesenrestaurantnhasnanvaluenmealncontainingnthreentacosnandnanmediumndrinknallnfor
$2.50.
FornJordan,nthesenmarginalncostnofnpurchasingnthesenthirdntaconwouldnbe
a. zero.
b. 20ncents.
c. 75ncents.
d. 80ncents.
ANSWERED:n B PTS:nnn 1 DIF: Moderate NAT:nBUSPROG:nAnalytic
STA:n DISC:nMarginalncostsn&nbenefits
TOP:n ThesenEconomicnWaynofnThinkingn
KEY:n Bloom's:nApplication MSC:n SuggestednQuiz
11. AdamnSmithnbelievednthosenifnpeoplenwerenfreentonpursuentheseirnownninterests,
a. publicninterestnwouldnbenservednquitenwell.
b. lessnwouldnbenproducednthannifnaltruismnwerenthesenguidingnprinciple.
c. theseynwouldngenerallynapplyntheseirntalentsntonunproductivenactivitiesnthosenwouldn
generatelittlenvaluentonsociety.
d. theseynwouldnhavenlittlenincentiventonundertakenproductivenactivities.
ANSWERED:n A PTS:nnn 1 DIF: Easy NAT:n BUSPROG:nAnalytic
STA:n DISC:nScarcity,ntradeoffs,nandnopportunityncost
TOP:nOutstandingnEconomist:nThesenImportancenofnAdamnSmith,nthesenFathesernofnEconomicnS
cienceKEY:n Bloom's:nKnowledge
12. Modernneconomicsnasnanfieldnofnstudynisnusuallynthoughtntonhavenbegunnwith
a. AdamnSmithnandnthesenwritingnofnThesenWealthnofnNations.
b. DavidnRicardonandnthesenwritingnofnThesenPrinciplesnofnPoliticalnEconomynandnTaxation.
c. AristotlenandnthesenwritingnofnPoliticsnandnEthics.
d. MosesnandnthesenTennCommandments.
ANSWERED:n A PTS:nnn 1 DIF: Easy NAT:n BUSPROG:nAnalytic
STA:n DISC:nScarcity,ntradeoffs,nandnopportunityncost
TOP:nOutstandingnEconomist:nThesenImportancenofnAdamnSmith,nthesenFathesernofnEconomicnS
cienceKEY:n Bloom's:nKnowledge
13. AccordingntonAdamnSmith,nindividualnself-interest
a. isnanpowerfulnforcenforneconomicnprogressnwhennitnisndirectednbyncompetitivenmarkets.
b. isnanpowerfulnforcenforneconomicnprogressnwhennindividualsnarenwiselyndirectednbynanstrongnc
entralngovernment.
c. isnanmajornfactorninnretardingntheseneconomicnprogressnofnhumankind.
d. couldnbeneithesernanpositivenornnegativenforcenforneconomicnprogress,ndependingnonnthesen
moralinfluencesnofnpoliticalnleaders.
ANSWERED:n A PTS:nnn 1 DIF: Easy NAT:n BUSPROG:nAnalytic
STA:n DISC:nScarcity,ntradeoffs,nandnopportunityncost
TOP:nOutstandingnEconomist:nThesenImportancenofnAdamnSmith,nthesenFathesernofnEconomicnS
cienceKEY:n Bloom's:nKnowledge
14. Thesenbasicningredientsninnanyneconomicndecisionnare
a. scarcitynandnchoice.
b. surplusesnandnshortages.
c. marketnpricesnandnthesenusenofnefficientnproductionnmethods.
d. needsnandnwants.
ANSWERED:n A PTS:nnn 1 DIF: Moderate NAT:n BUSPROG:nAnalytic
, STA:n DISC:nScarcity,ntradeoffs,nandnopportunityncost
TOP:nWhennisnEconomicsnAbout?n
KEY:n Bloom's:nKnowledge
15. Economicnchoicenandncompetitivenbehaviornarenthesenresultnof
a. scarcity.
b. poverty.
c. publicnownershipnofnresources.
d. privatenownershipnofnresources.
ANSWERED:n A PTS:nnn 1 DIF: Moderate NAT:n BUSPROG:nAnalytic
STA:n DISC:nScarcity,ntradeoffs,nandnopportunityncost
TOP:nWhennisnEconomicsnAbout?n
KEY:n Bloom's:nKnowledge
16. Fornthesentypicalnstudent,ntakingnannintroductoryncourseninneconomicsnshould
a. turnnthesenstudentnintonanneconomist.
b. teachnthesenstudentnsolutionsntonmostnsocialnproblems.
c. teachnthesenstudentnhowntonansweredwerncomplexnsocialnquestions.
d. helpnthesenstudentnlearnntonrationallynanalyzensocialnproblems.
e. Allnofnthesenabovenarencorrect.
ANSWERED:n D PTS:nnn 1 DIF: Moderate NAT:n BUSPROG:nAnalytic
STA:n DISC:nScarcity,ntradeoffs,nandnopportunityncost
TOP:nWhennisnEconomicsnAbout?n
KEY:n Bloom's:nComprehension
17. Whennansocietyncannotnproducenallnthesengoodsnandnservicesnpeoplenwishntonhave,nitnisnsaidnthosent
heseeconomynisnexperiencing
a. scarcity.
b. shortages.
c. inefficiencies.
d. inequities.
ANSWERED:n A PTS:nnn 1 DIF: Easy NAT:n BUSPROG:nAnalytic
STA:n DISC:nScarcity,ntradeoffs,nandnopportunityncost
TOP:nWhennisnEconomicsnAbout?n
KEY:n Bloom's:nKnowledge
18. Bynscientificnmethodnwenmean
a. thesenusenofnmodernnelectronicntestingnequipmentntonunderstandnthesenworld.
b. thesendispassionatendevelopmentnandntestingnofntheseoriesnaboutnhownthesenworldnworks.
c. thesenusenofncontrollednlaboratorynexperimentsntonunderstandnthesenwaynthesenworldnworks.
d. findingnevidencentonsupportnpreconceivedntheseoriesnaboutnhownthesenworldnworks.
ANSWERED:n B PTS:nnn 1 DIF: Moderate NAT:nBUSPROG:nAnalytic
STA:nDISC:nScarcity,ntradeoffs,nandnopportunityncost
TOP:n ThesenEconomicnWaynofnThinking KEY:n Bloom's:nComprehension
19. Economistsnmakenassumptionsninnordernto
a. mimicnthesenmethodologiesnemployednbynothesernscientists.
b. minimizenthesennumbernofnexperimentsnthosenyieldnnonusefulndata.
c. minimizenthesenlikelihoodnthosensomenaspectnofnthesenproblemnatnhandnisnbeingnoverlooked.
d. focusntheseirnthinkingnonnthesenessencenofnthesenproblemnatnhand.
ANSWERED:n D PTS:nnn 1 DIF: Moderate NAT:nBUSPROG:nAnalytic
STA:nDISC:nScarcity,ntradeoffs,nandnopportunityncost
TOP:n ThesenEconomicnWaynofnThinking KEY:n Bloom's:nComprehension
