Test Bank for Microeconomics Edition 23 by McConnell , Guide A+

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Test Bank for Microeconomics Edition 23 by McConnell
CORRECT ANSWERS ARE 6) "The inflation rate is the highest it has
LOCATED IN THE 2ND HALF OF been in 40 years." This is an example of
a positive statement.
THIS DOC.
⊚ true
TRUE/FALSE - Write 'T' if the statement
⊚ false
is true and 'F' if the statement is false.
1) An economic model is an ideal or
7) "The Federal Reserve raising interest
utopian type of economy that society
rates is the best way to bring down
should strive to obtain through economic
inflation." This is an example of a
policy.
positive statement.
⊚ true
⊚ true
⊚ false
⊚ false
PR
2) Because economic generalizations are
8) "Wages in the economy are too low."
simplifications from reality, they are
This is an example of a normative
impractical and useless.
statement.
⊚ true
⊚ true
O
⊚ false
⊚ false

3) If economic theories are solidly based on
9) Macroeconomics explains the behavior
FD
relevant facts, then appropriate
of individual households and business
economic policy becomes obvious and
firms; microeconomics is concerned
uncontroversial.
with the behavior of aggregates or the
⊚ true
economy as a whole.
⊚ false
⊚ true
O
⊚ false
4) Normative statements are expressions of
facts.
C
10) Purposeful behavior implies that
⊚ true
everyone will make identical choices.
⊚ false
⊚ true
⊚ false
5) Positive statements are expressions of
value judgments.
11) Purposeful behavior implies that
⊚ true
everyone using marginal analysis will
⊚ false
always make correct choices.
⊚ true
⊚ false




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12) Marginal analysis means that decision 18) The artistic creations of professional
makers compare the extra benefits with singers, writers, and digital artists are
the extra costs of a specific choice. capital.
⊚ true ⊚ true
⊚ false ⊚ false

13) Rational individuals may make different 19) Products and services are scarce because
choices because their preferences and resources are scarce.
circumstances differ. ⊚ true
⊚ true ⊚ false
⊚ false
20) Products and services are scarce solely
14) Choices entail marginal costs because because resources are finite in amount.
PR
resources are scarce. ⊚ true
⊚ true ⊚ false
⊚ false
21) An economy cannot produce at a point
15) The production possibilities curve shows outside of its production possibilities
O
various combinations of two products curve because human economic wants
that an economy can produce when are insatiable.
achieving full employment. ⊚ true
FD
⊚ true ⊚ false
⊚ false
22) The process by which capital goods are
16) The production possibilities curve shows accumulated is known as investment.
what combination of two products that ⊚ true
O
an economy should produce. ⊚ false
⊚ true
⊚ false 23) A professional musician writing a new
C
song is engaging in investment.
17) The entrepreneur's sole function is to ⊚ true
combine other resources (land, labor, ⊚ false
and capital) in the production of some
good or service. 24) The present choice of position on the
⊚ true production possibilities curve will not
⊚ false influence the future location of the
curve.
⊚ true
⊚ false




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25) Although sleeping in on a workday or
school day has an opportunity cost,
sleeping late on the weekend does not.
⊚ true
⊚ false
PR
27)

Refer to the diagram. Given production
possibilities curve a, point Y indicates
that society is failing to use available
O
resources efficiently.
26)2 ⊚ true
6 ⊚ false
FD
)Refer to the diagram. Given production
possibilities curve a, the combination of
civilian and war goods indicated by
point X is unattainable to this economy.
⊚ true
O
⊚ false
C



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PR
28) 29)

Refer to the diagram. The movement Refer to the diagram. The movement
from curve a to curve b could be from curve a to curve c suggests an
explained by an increase in the quantity improvement in civilian goods
O
and/or quality of society's productive technology but not in war goods
resources. technology.
⊚ true ⊚ true
FD
⊚ false ⊚ false

30) An economy will always operate at some
point on its production possibilities
curve.
O
⊚ true
⊚ false
C
31) In drawing a particular budget line,
money income and the prices of the two
products are fixed.
⊚ true
⊚ false

32) The lower the consumer's income, the
higher his or her budget line.
⊚ true
⊚ false




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