Principles of Macroeconomics by John Sayre - Test Bank

Chapter 01

The Economic Problem

Multiple Choice Questions
 

1. What do economists mean when they say that the economy faces scarcity? 
A. There are fewer resources available than there were in the 1960s.
B. It is quite evident that the world is running out of resources.
C. The economy is producing far below its capacity to produce.
D. The resources available are not sufficient to produce all that everyone wants.

Accessibility: Keyboard Navigation
Blooms: Remember
Blooms: Understand
Difficulty: Easy
Learning Objective: 01-03 Demonstrate that because scarcity; choice; and opportunity cost are at the heart of economics; efficiency—both productive and allocative—provides a major cornerstone.
Topic: 01-07 Efficiency and Allocation
 

2. What do economists assume is true about human wants? 
A. They are easily defined.
B. That we are on the verge of being able to satisfy them.
C. They are unlimited.
D. They haven't changed much over the centuries.

Accessibility: Keyboard Navigation
Blooms: Remember
Blooms: Understand
Difficulty: Easy
Learning Objective: 01-03 Demonstrate that because scarcity; choice; and opportunity cost are at the heart of economics; efficiency—both productive and allocative—provides a major cornerstone.
Topic: 01-07 Efficiency and Allocation
 

3. Which of the following terms describes the next best alternative that must be sacrificed as a result of making a particular choice? 
A. Microeconomics.
B. Opportunity cost.
C. Macroeconomics.
D. The law of increasing costs.
E. Scarcity.

Accessibility: Keyboard Navigation
Blooms: Remember
Blooms: Understand
Difficulty: Easy
Learning Objective: 01-03 Demonstrate that because scarcity; choice; and opportunity cost are at the heart of economics; efficiency—both productive and allocative—provides a major cornerstone.
Topic: 01-07 Efficiency and Allocation
 

4. What is the opportunity cost of a particular product? 
A. The price paid for that product.
B. The value put on that product by the person who bought it.
C. The value of the next-best alternative that is given up as a result of buying that particular product.
D. The combined value of all the other alternatives that are given up as a result of buying that particular product.

Accessibility: Keyboard Navigation
Blooms: Remember
Blooms: Understand
Difficulty: Easy
Learning Objective: 01-03 Demonstrate that because scarcity; choice; and opportunity cost are at the heart of economics; efficiency—both productive and allocative—provides a major cornerstone.
Topic: 01-07 Efficiency and Allocation