ECN 201 EXAM 1

The 3 key economic questions include all of the following EXCEPT Select one: a. "where should these products be produced?" b. "how do we produce these products?" c. "what products do we produce?" d. "who consumes the products?"

a. "where should these products be produced?"

Which of the following is a microeconomic question? Select one: a. Should companies pay for employees' health insurance? b. Should the Fed attempt to influence the interest rate to control potential inflation? c. Should Congress and the president take action to reduce the unemployment rate? d. Why do some countries have higher economic growth rates than other countries?

a. Should companies pay for employees' health insurance?

Which of the following is a macroeconomic question? Select one: a. Should we have a constitutional amendment requiring the government to implement a national consumption tax to replace the current income tax? b. Why does a pharmaceutical manufacturer try to lower its production costs? c. Why did a leading computer manufacturer establish call centers in India? d. Should the government put a tax on alcohol in an attempt to assist in the funding of support groups like Alcoholics Anonymous?

a. Should we have a constitutional amendment requiring the government to implement a national consumption tax to replace the current income tax?

Scarcity can best be defined as a situation in which Select one: a. the resources we use to produce goods and services are limited. b. there are no buyers willing to purchase what sellers have produced. c. there are not enough goods to satisfy all of the buyers' demand. d. there is more than enough money to satisfy consumers' wants.

a. the resources we use to produce goods and services are limited.

Economics is best defined as the study of Select one: a. how consumers make purchasing decisions. b. choices made by people faced with scarcity. c. inflation, unemployment, and economic growth. d. financial decision-making.

b. choices made by people faced with scarcity.

The study of the choices made by individual households, firms, and government is called Select one: a. macroeconomics. b. microeconomics. c. market economics. d. managerial economics.

b. microeconomics.

Resources are all of the following EXCEPT Select one: a. the things we use to produce goods and services. b. unlimited and in abundance. c. scarce and therefore require choices to be made. d. limited in quantity and can be used in different ways.

b. unlimited and in abundance.

Normative economics Select one: a. answers the question "What is?" b. is the focus of most modern economic reasoning. c. answers the question "What ought to be?" d. predicts the consequences of alternative actions.

c. answers the question "What ought to be?"

Which of the following is a question answered with normative economic reasoning? Select one: a. If the college offers free textbooks for students, will more students read their textbooks? b. If the college increased its enrollment requirements, would class size decline? c. If the college provided less financial aid for out-of-state students, would more in-state students benefit? d. Should the college increase tuition to fund its athletic programs?

d. Should the college increase tuition to fund its athletic programs?

Macroeconomics is best described as the study of Select one: a. the choices made by individual households, firms, and governments. b. the relationship between inflation and wage inequality. c. very large issues. d. the nation's economy as a whole.

d. the nation's economy as a whole.