A) to organize production so that scarcity does not occur.
B) firms make profits.
C) we make choices in the face of scarcity.
D) to create incentives so that scarcity does not exist.
E) businesses reach decisions.
Answer: C
Topic: Definition of economics
Skill: Level 1: Definition
Section: Checkpoint 1.1
Status: Old
AACSB: Reflective thinking
12) Which of the following best defines economics?
A) Economics teaches how to limit our wants.
B) Economics studies how to choose the best alternative when coping with scarcity.
C) Economics helps you earn as much money as possible.
D) Economics analyzes all aspects of human behavior in general.
E) Economics is concerned with prices and quantities of goods and services, both at the individual level and at the industry level.
Answer: B
Topic: Definition of economics
Skill: Level 1: Definition
Section: Checkpoint 1.1
Status: Old
AACSB: Reflective thinking
13) Economics is the social science that studies
A) the real reasons people buy goods and services.
B) the psychology of individuals and businesses.
C) whether a nation has enough natural resources.
D) how people make choices to cope with scarcity.
E) how choices made in the social interest could eliminate scarcity.
Answer: D
Topic: Definition of economics
Skill: Level 1: Definition
Section: Checkpoint 1.1
Status: Old
AACSB: Reflective thinking
14) Economics is best defined as the social science that studies
A) how a person can get everything he or she wants.
B) the reason money exists.
C) the way to eliminate choices in our decisions.
D) the choices that societies, and the people and institutions that make up societies, make in dealing with the issue of scarcity.
E) how choices made in the social interest must conflict with choices made in the self-interest.
Answer: D
Topic: Definition of economics
Skill: Level 1: Definition
Section: Checkpoint 1.1
Status: Old
AACSB: Reflective thinking
15) Microeconomics includes the study of the
A) aggregate effects on the national economy.
B) recessions and inflation in the global economy.
C) choices made by individuals and businesses.
D) reasons why the government changes interest rates.
E) nationwide unemployment rate.
Answer: C
Topic: Microeconomics
Skill: Level 1: Definition
Section: Checkpoint 1.1
Status: Old
AACSB: Reflective thinking
16) The primary focus of microeconomics is
A) to examine the operation of the entire (aggregate) economy.
B) to examine the behavior and operation of the individual units or sectors that make up the economy.
C) our government's monetary policy.
D) the levels of employment and inflation.
E) to study how we managed to eliminate scarcity.
Answer: B
Topic: Microeconomics
Skill: Level 1: Definition
Section: Checkpoint 1.1
Status: Old
AACSB: Reflective thinking
17) Which of the following is a microeconomic issue?
A) The price of gasoline increases in the United States this year.
B) The Brazilian economy experiences rapid economic growth.
C) The unemployment rate soars in Spain.
D) Inflation skyrockets in Russia.
E) The U.S. government cuts taxes to combat a recession.
Answer: A
Topic: Microeconomics
Skill: Level 2: Using definitions
Section: Checkpoint 1.1
Status: Old
AACSB: Reflective thinking
18) Which of the following is a microeconomic issue?
A) Growth in the U.S. economy slowed.
B) Increased federal government expenditures have lowered the unemployment rate.
C) The inflation rate fell this year.
D) The quantity of wheat grown in the United States increases this year.
E) The U.S. government cuts taxes to combat a recession.
Answer: D
Topic: Microeconomics
Skill: Level 2: Using definitions
Section: Checkpoint 1.1
Status: Old
AACSB: Reflective thinking
19) Which of the following is a microeconomic topic?
i. K-Mart's decision to close stores that are not making a profit
ii. Home Depot's choice to hire more full-time employees because its sales increased
iii. Delta Airlines changes its fares.
A) i only
B) ii only
C) i and iii
D) ii and iii
E) i, ii, and iii
Answer: E
Topic: Microeconomics
Skill: Level 2: Using definitions
Section: Checkpoint 1.1