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Issues in Economics Today 8th Edition Test Bank

Issues in Economics Today 8th Edition Test Bank simplifies revision with topic-wise summaries, expert strategies, and plenty of practice exercises.

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    Chapter 1 Economics: The Study o f Opportunity Cost Page 1 © 201 8 by McGraw - Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part. Multiple Choice 1) Economics is the study of A) how much people should buy and the prices they should be willing to pay. B) how much people should sell and the prices they should be willing to accept. C) the allocation of the world's freely available resources and who should get them. D) the allocation and use of scarce resources to satisfy unlimited human wants. Answer: D Learning Objective: 01 - 01 Topic: Economics and Opportunity Cost Blooms: Remember AACSB: Analytical Thinking Difficulty: 1 Easy 2) The one word in the definition of economics that focuses on the fact that it is impossible to provide all of the goods and services that everyone wants is A) s carcity . B) r esources . C) s tudy . D) a llocation . Answer: A Learning Objective: 01 - 01 Topic: Economics and Opportunity Cost Blooms: Understand AACSB: Analytical Thinking Difficulty: 1 Easy 3) The one word in the definition of economics that focuses on the fact that we have to make choices about who gets what and how much is A) s carcity . B) r esources . C) s tudy . D) a llocation . Answer: D Learning Objective: 01 - 01 Topic: Economics and Opportunity Cost Blooms: Understand AACSB: Analytical Thinking Difficulty: 1 Easy

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    Page 2 © 201 8 by McGraw - Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part. 4) Economists focus on “unlimited human wants” rather than _____ to describe our pursuit of goods and services. A) n eeds B) p rices C) o utput D) p hysical requirements Answer: A Learning Objective: 01 - 01 Topic: Economics and Opportunity Cost Blooms: Understand AACSB: Analytical Thinking Difficulty: 1 Easy 5) Scarcity implies that the allocation scheme chosen by society can A) not make more of any one good. B) typically make more of a good but at the expense of making less of another. C) always make more of all goods simultaneously. Answer: C Learning Objective: 01 - 01 Topic: Economics and Opportunity Cost Blooms: Understand AACSB: Analytical Thinking Difficulty: 1 Easy 6) Prod uction possibilities frontier models A) the choices we make in setting prices. B) the choices we make in setting output alternatives. C) the choices we make in setting wages. D) the choices we make in setting incomes. Answer: B Learning Objective: 01 - 01 Topic: Economics and Opportunity Cost Blooms: Remember AACSB: Analytical Thinking Difficulty: 1 Easy

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    Page 3 © 201 8 by McGraw - Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part. 7) A production possibilities frontier is a simple model of A) scarcity and allocation. B) prices and output. C) production and costs. D) inputs and outputs. Answer: A Learning Objective: 01 - 01 Topic: Economics and Opportunity Cost Blooms: Remember AACSB: Analytical Thinking Difficulty: 1 Easy 8) A simplifying assumption is typically made so as to A) make a point clearer by stripping away excess detail. B) make a point clearer by adding sufficient detail to get things precise. C) divert attention from the real problem. D) make things look better than they really are. Answer: A Learning Objective: 01 - 01 Topic: Economics and Opportunity Cost Blooms: Understand AACSB: Analytical Thinking Difficulty: 1 Easy 9) Something is scarce as long as A) there is a price that the market puts on the item. B) there is no freely available infinite source of the item. C) the government provides it. D) the market provides it. Answer: B Learning Objective: 01 - 01 Topic: Economics and Opportunity Cost Blooms: Understand AACSB: Analytical Thinking Difficulty: 1 Easy

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    Page 4 © 201 8 by McGraw - Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part. 10) A resource A) must come from the earth. B) only includes physical things. C) is anything that we consume directly or use to make things we will ultimately consume. D) A) and C) Answer: C Learning Objective: 01 - 01 Topic: Economics and Opportunity Cost Blooms: Remember AACSB: Analytical Thinking Difficulty: 1 Easy 11) The underlying reason that there are unattainable points on a production possibilities frontier diagram is that there A) is government. B) are always choices that have to be made. C) is a scarcity of resources within a fixed level of technology. D) is unemployment of resources. Answer: C Learning Objective: 01 - 01 Topic: Modeling Opportunity Cost Using the Production Possibilities Frontier Blooms: Apply AACSB: Knowledge Application Difficulty: 2 Medium 12) The underlying reason production possibilities frontiers are likely to be bowed out (rather than linear) is A) choices have consequences. B) there is always opportunity costs. C) some resources and people can be better used producing one good rather than another. D) there is always some level of unemployment. Answer: C Learning Objective: 01 - 01 Topic: Modeling Opportunity Cost Using the Production Possibilities Frontier Blooms: Apply AACSB: Knowledge Application Difficulty: 2 Medium

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    Page 5 © 201 8 by McGraw - Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part. 13) The optimization assumption suggests that people make A) irrational decisions. B) unpredictable decisions. C) decisions to make themselves as well off as possible. D) decisions without thinking very hard. Answer: C Learning Objective: 01 - 01 Topic: Modeling Opportunity Cost Using the Production Possibilities Frontier Blooms: Apply AACSB: Knowledge Application Difficulty: 2 Medium 14) The fact that we are operating at a point inside a bowed out production possibilities frontier, indicates there is A) scarcity. B) constant opportunity cost. C) unemployment. D) increasing opportunity cost. Answer: C Learning Objective: 01 - 01 Topic: Modeling Opportunity Cost Using the Production Possibilities Frontier Blooms: Apply AACSB: Knowledge Application Difficulty: 2 Medium 15) If the production possibilities frontier is not bowed out but is a line, indicates there is A) scarcity. B) constant opportunity cost. C) unemployment. D) increasing opportunity cost. Answer: B Learning Objective: 01 - 0 2 Topic: Modeling Opportunity Cost Using the Production Possibilities Frontier Blooms: Apply AACSB: Knowledge Application Difficulty: 2 Medium

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    Page 6 © 201 8 by McGraw - Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part. 16) The fact that the production possibilities frontier is bowed out indicates there is A) scarcity. B) constant opportunity cost. C) unemployment. D) increasing opportunity cost. Answer: D Learning Objective: 01 - 0 2 Topic: Modeling Opportunity Cost Using the Production Possibilities Frontier Blooms: Apply AACSB: Knowledge Application Difficulty: 2 Medium 17) The fact that we cannot operate at a point outside a production possibilities frontier indicates there is A) scarcity. B) constant opportunity cost. C) unemployment. D) increasing opportunity cost. Answer: A Learning Objective: 01 - 01 Topic: Modeling Opportunity Cost Using the Production Possibilities Frontier Blooms: Apply AACSB: Knowledge Application Difficulty: 2 Medium 18) Points on the Production Possibilities Frontier are A) attainable. B) unattainable. C) associated with some unemployment D) both attainable and unattainable. Answer: A Learning Objective: 01 - 01 Topic: Modeling Opportunity Cost Using the Production Possibilities Frontier Blooms: Apply AACSB: Knowledge Application Difficulty: 2 Medium

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    Page 7 © 201 8 by McGraw - Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part. 19) Points inside the Production Possibilities Frontier are A) attainable. B) unattainable. C) associated with some unemployment. D) both attainable and unattainable. Answer: D Learning Objective: 01 - 01 Topic: Modeling Opportunity Cost Using the Production Possibilities Frontier Blooms: Apply AACSB: Knowledge Application Difficulty: 2 Medium 20) Points outside the Production Possibilities Frontier are A) attainable. B) unattainable. C) associated with some unemployment. D) both attainable and unattainable. Answer: B Learning Objective: 01 - 01 Topic: Attributes of the Production Possibilities Frontier Blooms: Apply AACSB: Knowledge Application Difficulty: 2 Medium

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    Page 8 © 201 8 by McGraw - Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part. 21) In Figure 1.1 , which labeled points are attainable? A) only A B) only B and C C) only D D) A, B and C Answer: D Learning Objective: 01 - 01 Topic: Attributes of the Production Possibilities Frontier Blooms: Apply AACSB: Knowledge Application Difficulty: 2 Medium

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    Page 9 © 201 8 by McGraw - Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part. 22) In Figure 1.1, which labeled points are unattainable? A) only A B) only B and C C) only D D) A, B and C Answer: C Learning Objective: 01 - 01 Topic: Attributes of the Production Possibilities Frontier Blooms: Apply AACSB: Knowledge Application Difficulty: 2 Medium

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    Page 10 © 201 8 by McGraw - Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part. 23) In Figure 1.1 , which labeled points represent the existence of unemployment? a. only A b. only B and C c. only D d. A, B and C Answer: A Learning Objective: 01 - 01 Topic: Attributes of the Production Possibilities Frontier Blooms: Apply AACSB: Knowledge Application Difficulty: 2 Medium

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    Page 11 © 201 8 by McGraw - Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part. 24) In Figure 1.1 , which labeled point indicates that there are sufficient resources and technology to produce the combination of goods represented by that point? A) only A B) only B and C C) only D D) A, B and C Answer: D Learning Objective: 01 - 01 Topic: Attributes of the Production Possibilities Frontier Blooms: Apply AACSB: Knowledge Application Difficulty: 2 Medium

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    Page 12 © 201 8 by McGraw - Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part. 25) In Figure 1.1 , which labeled point indicates that there are insufficient resources or technology to produce the combination of goods represented by that point? A) only A B) only B and C C) only D D) A, B and C Answer: C Learning Objective: 01 - 01 Topic: Attributes of the Production Possibilities Frontier Blooms: Apply AACSB: Knowledge Application Difficulty: 2 Medium

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    Page 13 © 201 8 by McGraw - Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part. 26) In Figure 1.2 , which labeled points are attainable? A) only A B) only B and C C) only D D) A, B and C Answer: D Learning Objective: 01 - 01 Topic: Attributes of the Production Possibilities Frontier Blooms: Apply AACSB: Knowledge Application Difficulty: 2 Medium

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    Page 14 © 201 8 by McGraw - Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part. 27) In Figure 1.2 , which labeled points are unattainable? A) only A B) only B and C C) only D D) A, B and C Answer: C Learning Objective: 01 - 01 Topic: Attributes of the Production Possibilities Frontier Blooms: Apply AACSB: Knowledge Application Difficulty: 2 Medium

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    Page 15 © 201 8 by McGraw - Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part. 28) In Figure 1.2 , which labeled points represent the existence of unemployment? A) only A B) only B and C C) only D D) A, B and C Answer: A Learning Objective: 01 - 01 Topic: Attributes of the Production Possibilities Frontier Blooms: Apply AACSB: Knowledge Application Difficulty: 2 Medium

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