Unit 1 Exploring Economics

________ is(are) concerned with how labor markets determine salaries. a) Microeconomics b) Macroeconomics c) Both macroeconomics and microeconomics d) Economics

a) Microeconomics

One of the more disputed political issues of 2010 was whether the Bush-era tax cuts should be extended. Those opposed to their extension argued that they benefited people with higher incomes more than those with lower incomes. An economist would say that the opponents were concerned with the ________ of the tax cuts. a) equity b) efficiency c) equity and efficiency d) effectiveness

a) equity

Designing policies to mitigate environmental damage uses the tools of: a) microeconomics. b) macroeconomics. c) both macroeconomics and microeconomics. d) neither macroeconomics nor microeconomics.

a) microeconomics.

Which of the following would be most closely related to microeconomics? a) How rising wages affects the choice of working instead of going to school. b) The extent to which people leaving the labor force affects unemployment. c) The effect of improving consumer confidence on economic growth. d) How rising prices cause standards of living to fall. e) How much prices rise due to increasing inflation.

b) The extent to which people leaving the labor force affects unemployment.

To study the effect of price on Brett's demand for rock climbing lessons, we hold his monthly income constant. This is an example of a(n) _______ assumption. a) e pluribus unum b) ceteris paribus c) carpe diem d) carpe vinum

b) ceteris paribus

Microeconomics focuses on __________ by individuals, businesses, industries, and government. a) money lost b) decision-making c) money earned d) profit earned

b) decision-making

In some countries it is legal for people to sell their human organs, particularly kidneys. Those who would favor this argue that it results in ____. a) equity b) efficiency c) both efficiency and equity d) neither efficiency nor equity

b) efficiency

Economics is the study of how individuals, firms, and society allocate ________ resources to many competing wants a) societal b) limited c) company d) government

b) limited

Which of the following words best describes what economics is about? a) Money b) Happiness c) Choices d) Growth

c) Choices

Which of the following is an example of a microeconomic topic? a) How high oil prices affect economic growth. b) The effect of increased trade on unemployment. c) How a gas station changes pricing in response to a new competitor. d) The effect of monetary policy on inflation.

c) How a gas station changes pricing in response to a new competitor.

________ is (are) concerned with how trade policy can affect unemployment. a) Microeconomics b) Economics c) Macroeconomics d) Neither macroeconomics nor microeconomics

c) Macroeconomics

Which of the following is an example of a microeconomic topic? a) How the national debt affects economic growth. b) The effect of exchange rates on international trade. c) Why a movie theatre charges different prices to different groups of people. d) The effect of monetary policy on interest rates.

c) Why a movie theatre charges different prices to different groups of people.

Economists look for rational responses to: a) stimuli. b) insults. c) incentives. d) emotions.

c) incentives.

Call centers offering technical support for American products have been moved to India to take advantage of lower labor costs. This is an example of: a) allocative efficiency. b) equity. c) production efficiency. d) both production and allocative efficiency.

c) production efficiency.

Markets are efficient because people make __________ choices. a) individual b) irrational c) rational d) good

c) rational

What is the main problem addressed with scarcity? a) Trying to satisfy the basic needs of everyone to eliminate poverty. b) Ensuring that an adequate standard of living is achieved. c) Making sure that critical resources such as oil and forests are not depleted. d) Determining how to address unlimited wants with limited resources. Submit

d) Determining how to address unlimited wants with limited resources. Submit

A dozen friends got together to celebrate a birthday. If the cake is cut into 12 pieces of the same size and each of the 12 party goers gets a slice, this cake distribution is: a) Efficient, but not equitable b) Equitable, but not efficient c) Efficient and Equitable d) Equitable

d) Equitable

________ is(are) concerned with how much more expensive goods in general will become this year. a) Microeconomics b) Both microeconomics and macroeconomics c) Economics d) Macroeconomics

d) Macroeconomics

Economists and policy makers often deal with the tradeoff between efficiency and: a) cost. b) profit. c) revenue. d) equity.

d) equity.

Because of scarcity: a) resources are limitless. b) wants are limited. c) choices are unlimited. d) we face tradeoffs in nearly every choice we make.

d) we face tradeoffs in nearly every choice we make.