Test Bank for Macroeconomics, 22nd
Edition, Campbell McConnell, Stanley Brue
Sean Flynn
Version 1 1
,TRUE/FALSE - Write 'T' if the statement is true and 'F' if the statement is false.
1) An economic model is an ideal or utopian type of economy that society should strive to
obtain through economic policy.
⊚ true
⊚ false
2) Because economic generalizations are simplifications from reality, they are impractical
and useless.
⊚ true
⊚ false
3) If economic theories are solidly based on relevant facts, then appropriate economic policy
becomes obvious and uncontroversial.
⊚ true
⊚ false
4) Normative statements are expressions of facts.
⊚ true
⊚ false
5) Positive statements are expressions of value judgments.
⊚ true
⊚ false
6) Macroeconomics explains the behavior of individual households and business firms;
microeconomics is concerned with the behavior of aggregates or the economy as a whole.
⊚ true
⊚ false
7) Purposeful behavior implies that everyone will make identical choices.
Version 1 2
, ⊚ true
⊚ false
8) Marginal analysis means that decision makers compare the extra benefits with the extra
costs of a specific choice.
⊚ true
⊚ false
9) Rational individuals may make different choices because their preferences and
circumstances differ.
⊚ true
⊚ false
10) Choices entail marginal costs because resources are scarce.
⊚ true
⊚ false
11) The production possibilities curve shows various combinations of two products that an
economy can produce when achieving full employment.
⊚ true
⊚ false
12) The entrepreneur's sole function is to combine other resources (land, labor, and capital) in
the production of some good or service.
⊚ true
⊚ false
13) Products and services are scarce because resources are scarce.
⊚ true
⊚ false
Version 1 3
, 14) An economy cannot produce at a point outside of its production possibilities curve
because human economic wants are insatiable.
⊚ true
⊚ false
15) The process by which capital goods are accumulated is known as investment.
⊚ true
⊚ false
16) The present choice of position on the production possibilities curve will not influence the
future location of the curve.
⊚ true
⊚ false
17) Although sleeping in on a work day or school day has an opportunity cost, sleeping late
on the weekend does not.
⊚ true
⊚ false
Version 1 4
Edition, Campbell McConnell, Stanley Brue
Sean Flynn
Version 1 1
,TRUE/FALSE - Write 'T' if the statement is true and 'F' if the statement is false.
1) An economic model is an ideal or utopian type of economy that society should strive to
obtain through economic policy.
⊚ true
⊚ false
2) Because economic generalizations are simplifications from reality, they are impractical
and useless.
⊚ true
⊚ false
3) If economic theories are solidly based on relevant facts, then appropriate economic policy
becomes obvious and uncontroversial.
⊚ true
⊚ false
4) Normative statements are expressions of facts.
⊚ true
⊚ false
5) Positive statements are expressions of value judgments.
⊚ true
⊚ false
6) Macroeconomics explains the behavior of individual households and business firms;
microeconomics is concerned with the behavior of aggregates or the economy as a whole.
⊚ true
⊚ false
7) Purposeful behavior implies that everyone will make identical choices.
Version 1 2
, ⊚ true
⊚ false
8) Marginal analysis means that decision makers compare the extra benefits with the extra
costs of a specific choice.
⊚ true
⊚ false
9) Rational individuals may make different choices because their preferences and
circumstances differ.
⊚ true
⊚ false
10) Choices entail marginal costs because resources are scarce.
⊚ true
⊚ false
11) The production possibilities curve shows various combinations of two products that an
economy can produce when achieving full employment.
⊚ true
⊚ false
12) The entrepreneur's sole function is to combine other resources (land, labor, and capital) in
the production of some good or service.
⊚ true
⊚ false
13) Products and services are scarce because resources are scarce.
⊚ true
⊚ false
Version 1 3
, 14) An economy cannot produce at a point outside of its production possibilities curve
because human economic wants are insatiable.
⊚ true
⊚ false
15) The process by which capital goods are accumulated is known as investment.
⊚ true
⊚ false
16) The present choice of position on the production possibilities curve will not influence the
future location of the curve.
⊚ true
⊚ false
17) Although sleeping in on a work day or school day has an opportunity cost, sleeping late
on the weekend does not.
⊚ true
⊚ false
Version 1 4
