Macroeconomics 16th Edition by Campbell R. McConnell Test bank

 

70)  Any combination of goods lying outside of the budget line:

      
       A) implies that the consumer is not spending all of his income.
       B) yields less utility than any point on the budget line.
       C) yields less utility than any point inside the budget line.
       D) is unattainable, given the consumer's income.
      

 

71)  The budget line shift from cd to ab in the below figure is consistent with:

      
       A) decreases in the prices of both M and N.
       B) an increase in the price of M and a decrease in the price of N.
       C) a decrease in money income.
       D) an increase in money income.
      

 

72)  A leftward shift of a consumer's budget line to a position parallel with the original one could indicate that the:

      
       A) price of one product has decreased in relation to the other.    
       B) prices of both products have decreased in the same proportion.
       C) marginal utilities derived from both products have decreased.
       D) consumer's money income has increased but the prices of both products have increased proportionately more.
      

 

73)  Which of the following statements is not correct?

      
       A) A reduction in money income will shift the budget line to the right. 
       B) A reduction in money income accompanied by an increase in product prices will necessarily shift the budget line to the left.
       C) An increase in product prices will shift the budget line to the left.
       D) An increase in money income will shift the budget line to the right.
      

 

74)  The society must also make choices under conditions of scarcity. This problem arises from the fact that:

      
       A) society's wants are limited but the resources are not. 
       B) resources are scarce relative to society's wants.
       C) societies behave only in their self-interest.
       D) society's wants and resources are both unlimited.
      

 

75)  The fundamental problem of economics is:

      
       A) to establish a democratic political framework for the provision of social goods and services.
       B) the establishment of prices which accurately reflect the relative scarcities of products and resources.
       C) the scarcity of productive resources relative to material wants.
       D) to achieve a more equitable distribution of money income in order to mitigate poverty.
      

 

76)  Economic resources are also called:

      
       A) free gifts of nature.     
       B) consumption goods.
       C) units of money capital.
       D) factors of production.