Test Bank For The Macro Economy Today Bradley Schiller 15 Edition
The Macro Economy Today, 15e (Schiller)
Chapter 1 Economics: The Core Issues
1) Which of the following is not one of the three core economic issues that must be resolved?
A) How to produce the goods and services we select.
B) What to produce with unlimited resources.
C) Who should get the goods and services we produce.
D) What to produce with limited resources.
2) The fundamental problem of economics is
A) The law of increasing opportunity costs.
B) The scarcity of resources relative to human wants.
C) How to get government to operate efficiently.
D) How to create employment for everyone.
3) In economics, scarcity means that
A) A shortage of a particular good will cause the price to fall.
B) A production possibilities curve cannot accurately represent the trade-off between two goods.
C) Society’s desires exceed resources available.
D) The market mechanism has failed.
4) Given that resources are scarce,
A) A “free lunch” is possible, but only for a limited number of people.
B) Opportunity costs are experienced whenever choices are made.
C) Poor countries must make choices, but rich countries with abundant resources do not have to make choices.
D) Some choices involve opportunity costs while other choices do not.
5) A consequence of the economic problem of scarcity is that
A) Choices have to be made about how resources are used.
B) There is never too much of any good or service produced.
C) The production of goods and services must be controlled by the government.
D) The production possibilities curve is bowed outward.
6) The basic factors of production include
A) Land, labor, money, and capital.
B) Land, labor, money, and inputs.
C) Labor and money.
D) Land, labor, capital, and entrepreneurship.
7) Factors of production are
A) Scarce in every society.
B) Scarce only in advanced countries.
C) Scarce only in the poorest countries of the world.
D) Unlimited in quantity.
8) Which of the following is not a factor of production?
A) A psychiatrist.
B) $100,000 cash.
C) A bulldozer.
D) Six thousand acres of farmland.
9) With respect to factors of production, which of the following statements is not true?
A) Factors of production are also known as resources.
B) In order to produce any good or service, it is necessary to have factors of production.
C) Factors of production include land, labor, capital, and entrepreneurship.
D) Only those resources that are privately owned are counted as factors of production.
10) Which of the following is the best example of land?
A) The ethanol refined from corn.
B) A factory that produces new goods and services.
C) The water used to make a soft drink.
D) A barber’s chair.
11) Capital, as economists use the term, refers to
A) The cash needed to start a new business.
B) The costs of operating a business.
C) Shares of stock issued by businesses.
D) Final goods that are used to produce other goods and services.
12) Which economist argued that free markets unleashed the “animal spirits” of entrepreneurs, propelling innovation, technology, and growth?
A) Lord Kelvin.
B) Kenneth Olsen.
C) Irving Fisher.
D) John Maynard Keynes.
13) The role of the entrepreneur in an economy is to
A) Bring the factors of production together and assume the risk of production.
B) Work with government planners to determine what goods are produced.
C) Arrange bank financing for the owners of new businesses.
D) Ensure full employment of labor.
14) Economics can be defined as the study of
A) For whom resources are allocated to increase efficiency.
B) How society spends the income of individuals.
C) How scarce resources are allocated.
D) None of the choices are correct.
15) Opportunity cost is
A) Measured only in dollars and cents.
B) The total dollar cost to society of producing the goods.
C) The difficulty associated with using one good in place of another.
D) What is given up in order to get something else.