Understanding Economics A Contemporary Perspective 8th Edition by Mark Lovewell Test bank

 
C. allow one to focus upon macro variables by ignoring micro variables
 
D. determine whether x causes y or vice versa
 
E. determine whether two variables are directly or inversely related
 
32.Suppose an economist says "Ceteris paribus, the lower the price of the breakfast cereal, Wheaties, the larger the amount of Wheaties purchased." This statement indicates that: 
 


A. the quantity of Wheaties purchased determines the price of Wheaties
 
B. all factors other than the price of Wheaties (for example, consumer preferences and incomes) are assumed to be constant
 
C. economists can conduct controlled laboratory experiments
 
D. one cannot generalize about the relationship between the price of Wheaties and quantity purchased
 
E. the price and quantity demanded of Wheaties are directly related
 
33.A positive statement is one that: 
 


A. outlines a direct relationship between two variables
 
B. outlines an inverse relationship between two variables
 
C. is subjective and is, therefore, based upon a value judgement
 
D. is necessarily true
 
E. is objective and is, therefore, based upon facts
 
34.Which of the following is a positive statement? 
 


A. The humidity is too high today.
 
B. It is too hot to jog today.
 
C. The temperature is 22°C.
 
D. I enjoy summer evenings when it cools off.
 
E. I dislike humid nights.
 
35.Normative statements are concerned with: 
 


A. facts and theories
 
B. what ought to be
 
C. what is
 
D. rational choice involving costs and benefits
 
E. what can never be
 
36.Which of the following is a normative statement? 
 


A. The temperature is high today.
 
B. The humidity is high today.
 
C. It is too hot to play tennis today.
 
D. It will cool off later this evening.
 
E. I think it will be hot today.
 
37.A product has utility if it: 
 


A. takes more and more resources to produce successive units of it
 
B. can be produced in unlimited quantities
 
C. satisfies consumer wants
 
D. is useful
 
E. is available in only limited quantities
 
38.Utility refers to the: 
 


A. extent to which a product can be used as a capital resource
 
B. opportunity cost of a product
 
C. relative scarcity of a product
 
D. usefulness of a product
 
E. satisfaction that a consumer derives from a good or service
 
39.To maximize utility, a consumer who derives greater satisfaction from writing music than from studying drama will choose to: 
 


A. study music
 
B. study drama
 
C. write plays
 
D. write music
 
E. both write music and study drama
 
40.Which of the following expressions best states the idea of opportunity cost? 
 


A. "A penny saved is a penny earned."
 
B. "He who hesitates is lost."
 
C. "There is no such thing as a free lunch."
 
D. "All that glitters is not gold."
 
E. "Watch the pennies, and the pounds will look after themselves."
 
41.The notion of opportunity cost: 
 


A. applies to consumers, but not to businesses
 
B. applies to businesses, but not to consumers
 
C. is relevant to economies of all ideological persuasions
 
D. would disappear if we were able to eliminate poverty
 
E. does not apply to governments
 
42.The concept of opportunity cost: 
 


A. is irrelevant in command economies because of central planning
 
B. suggests that resources are often unlimited in quantity
 
C. is irrelevant if the production possibilities curve is shifting to the right
 
D. suggests that inexhaustible wants can be fulfilled
 
E. suggests that the use of resources in any particular line of production means that alternative outputs must be forgone