Macroeconomics 20th Edition by McConnell, Brue, Flynn – Test Bank

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Edition: 20th Edition

Format: Downloadable ZIP File

Resource Type: Test bank

Duration: Unlimited downloads

Delivery: Instant Download

Macroeconomics 20th Edition by McConnell, Brue, Flynn – Test Bank

ISBN-10: 0077660811, ISBN-13: 978-0077660819

Chapter 01: Limits, Alternatives, Choices

Multiple Choice Questions

1. For economists, the word “utility” means:

A. versatility and flexibility.

 

B. rationality.

 

C. pleasure or satisfaction.

 

D. purposefulness.

 

2. In economics, the pleasure, happiness, or satisfaction received from a product is called:

A. marginal cost.

 

B. rational outcome.

 

C. status fulfillment.

 

D. utility.

 

3. When economists say that people act rationally in their self-interest, they mean that individuals:

A. look for and pursue opportunities to increase their utility.

 

B. generally disregard the interests of others.

 

C. are mainly creatures of habit.

 

D. are usually impulsive and unpredictable.

 

4. According to Emerson: “Want is a growing giant whom the coat of Have was never large enough to cover.” According to economists, “Want” exceeds “Have” because:

A. people are greedy.

 

B. productive resources are limited.

 

C. human beings are inherently insecure.

 

D. people are irrational.

 

5. According to economists, economic self-interest:

A. is a reality that underlies economic behavior.

 

B. has the same meaning as selfishness.

 

C. means that people never make wrong decisions.

 

D. is usually self-defeating.

 

6. Joe sold gold coins for $1,000 that he bought a year ago for $1,000. He says, “At least I didn’t lose any money on my financial investment.” His economist friend points out that in effect he did lose money because he could have received a 3 percent return on the $1,000 if he had bought a bank certificate of deposit instead of the coins. The economist’s analysis in this case incorporates the idea of:

A. opportunity costs.

 

B. marginal benefits that exceed marginal costs.

 

C. imperfect information.

 

D. normative economics.

 

7. A person should consume more of something when its marginal:

A. benefit exceeds its marginal cost.

 

B. cost exceeds its marginal benefit.

 

C. cost equals its marginal benefit.

 

D. benefit is still better.

 

8. Economics may best be defined as the:

A. interaction between macro and micro considerations.

 

B. social science concerned with how individuals, institutions, and society make optimal choices under conditions of scarcity.

 

C. empirical testing of value judgments through the use of logic.

 

D. study of why people are rational.

 

9. The study of economics is primarily concerned with:

A. keeping private businesses from losing money.

 

B. demonstrating that capitalistic economies are superior to socialistic economies.

 

C. choices that are made in seeking the best use of resources.

 

D. determining the most equitable distribution of society’s output.

 

10. The economic perspective entails:

A. irrational behavior by individuals and institutions.

 

B. a comparison of marginal benefits and marginal costs in decision making.

 

C. short-term but not long-term thinking.

 

D. rejection of the scientific method.

 

11. Purposeful behavior suggests that:

A. everyone will make identical choices.

 

B. resource availability exceeds economic wants.

 

C. individuals may make different choices because of different desired outcomes.

 

D. an individual’s economic goals cannot involve trade-offs.

 

12. Purposeful behavior means that:

A. people are selfish in their decision making.

 

B. people weigh costs and benefits to make decisions.

 

C. people are immune from emotions affecting their decisions.

 

D. decision makers do not make mistakes when weighing costs and benefits.

 

13. Economics involves marginal analysis because:

A. most decisions involve changes from the present situation.

 

B. marginal benefits always exceed marginal costs.

 

C. marginal costs always exceed marginal benefits.

 

D. much economic behavior is irrational.

 

14. You should decide to go to a movie:

A. if the marginal cost of the movie exceeds its marginal benefit.

 

B. if the marginal benefit of the movie exceeds its marginal cost.

 

C. if your income will allow you to buy a ticket.

 

D. because movies are enjoyable.

 

15. Opportunity costs exist because:

A. the decision to engage in one activity means forgoing some other activity.

 

B. wants are scarce relative to resources.

 

C. households and businesses make rational decisions.

 

D. most decisions do not involve sacrifices or trade-offs.

 

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