Test Bank The Exploration of Economics International Edition 4th Edition by Robert L. Sexton

Chapter 2—The Economic Way of Thinking

TRUE/FALSE

1. Scarcity is a problem faced by all but the wealthiest of citizens.

ANS:  F                    PTS:   1

2. Tractors, shovels, copy machines, and computer programming expertise are all examples of scarce resources.

ANS:  T                    PTS:   1

3. Human capital consists of computers, tools, and equipment owned by private individuals.

ANS:  F                    PTS:   1

4. An entrepreneur organizes the other factors of production and bears the business risk.

ANS:  T                    PTS:   1

5. According to economists, people who want more than they have now are greedy.

ANS:  F                    PTS:   1

6. Implementing a stricter smog control program after determining that the benefits of increased air quality outweigh the costs of pollution reduction is consistent with the rule of rational choice.

ANS:  T                    PTS:   1

7. Rational individuals act to advance their own self-interest; therefore, charitable giving must constitute irrational behavior.

ANS:  F                    PTS:   1

8. Economists believe that the stiff penalties for drug trafficking in Singapore do not affect the decision-making of those who traffic drugs.

ANS:  F                    PTS:   1

9. Marginal cost is the additional cost incurred as a result of an economic decision.

ANS:  T                    PTS:   1

10. When considering whether or not to consume the second slice of cake, an individual is following marginal thinking if she compares the total cost of consuming both the first and second slices with their total benefit before making a decision.

ANS:  F                    PTS:   1