Chapter 1 Practice Questions
Which of the following is most likely a topic of discussion in macroeconomics?
a decrease in the unemployment rate
Scarcity applies to decision makers in macroeconomics but not in microeconomics.
false
Scarcity is the result of:
wants that exceed the resources necessary to provide them.
Which of the following statements are true?
As a result of scarcity, individuals must make choices and face trade-offs, It is impossible to satisfy unlimited human wants with limited resources, Wealthy people face scarcity.
In his book, The Wealth of Nations, Adam Smith made the following observation?
People tend to pursue their own personal interest and that an invisible hand (the market) guides their self-interest, increasing social welfare and economic well being
From an economists' perspective, which of the following observations is not true?
Self-interest is purely monetary in nature.
Macroeconomics:
is concerned with the expansion and contraction of the overall economy.
When making decisions, economists believe that individuals act rationally if they:
people do the best they can, based on their values and information, under current and future circumstances.
A person behaving rationally will:
try to weigh the expected marginal benefits and marginal costs of their decision.
Which of the following is a statement of positive economics?
If the overall unemployment rate is 6 percent, teenage unemployment rates will exceed 12 percent.
The fallacy of composition is the erroneous view that:
if something is true for an individual, then it must also be true for a group.
The basic difference between macroeconomics and microeconomics is that:
microeconomics is concerned with individual markets while macroeconomics is concerned with aggregate markets.
Which of the following is an example of a normative statement?
Young people should learn how to prepare their own taxes.
Economists believe that most individuals act as if they are motivated by self-interest and:
respond in predictable ways to changing circumstances.