Test Bank of The Exploration of Macroeconomics International Edition 6th Edition

ISBN-10: 1111970386 ISBN-13: 978-1111970383

Chapter 3—Scarcity, Trade-Offs, and Production Possibilities

TRUE/FALSE

1. In a market economy, government officials make most production decisions in a centralized manner.

ANS: FPTS:1REF:p. 75

TOP: 3.1 The Three Economic Questions Every Society Faces | What Goods and Services Will Be Produced?

2. Consumer sovereignty means that consumers vote with their dollars in a market economy, which helps determine what is produced.

ANS: TPTS:1REF:p. 75

TOP: 3.1 The Three Economic Questions Every Society Faces | What Goods and Services Will Be Produced?

3. In a market economy, prices help determine the distribution of goods and services but not the allocation of resources.

ANS: FPTS:1REF:p. 76

TOP: 3.1 The Three Economic Questions Every Society Faces | How Will the Goods and Services Be Produced?

4. An increase in production of one good will have zero opportunity cost only if the economy initially existed at a point inside the production possibilities curve.

ANS: TPTS:1REF:p. 82