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. |
| C. |
pleasure or satisfaction. |
|
| 2. |
In economics, the pleasure, happiness, or satisfaction received from a product is called:
|
| 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:
| 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:
| B. |
marginal benefits that exceed marginal costs. |
| C. |
imperfect information. |
|
| 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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