Test Bank for Microeconomics Theory and Applications With Calculus 4th Edition by Perloff

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1.1 Microeconomics: The Allocation of Scarce Resources 1) Microeconomics studies the allocation of A) decision makers. B) scarce resources. C) models. D) unlimited resources. Answer: B Topic: Microeconomics: The Allocation of Scarce Resources Skill: Analtical thinkin! Status: "ld #) Microeconomics is often called A) price theor. B) decision science. C) scarcit. D) resource theor. theor. Answer: A Topic: Microeconomics: The Allocation of Scarce Resources Skill: Analtical thinkin! Status: "ld $) Most microeconomic models assume that decision makers wish to A) make themsel%es as well off as possi&le. B) act selfishl. C) make others as well off as possi&le. D) 'one of the a&o%e. Answer: A Topic: Microeconomics: The Allocation of Scarce Resources Skill: Analtical thinkin! Status: "ld () Societ faces tradeoffs &ecause of A) !o%ernment re!ulations. B) !reed corporations. C) faceless &ureaucrats. D) scarcit. Answer: D Topic: Microeconomics: The Allocation of Scarce Resources Skill: Analtical thinkin! Status: "ld

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) A market A) alwas in%ol%es the personal e2chan!e of !oods for mone. B) allows interactions &etween consumers and firms. C) alwas takes place at a phsical location. D) has no influence on prices. Answer: B Topic: Microeconomics: The Allocation of Scarce Resources Skill: Analtical thinkin! Status: "ld 3) 4hat links the decisions of consumers and firms in a market5 A) the !o%ernment B) prices C) coordination officials D) microeconomics Answer: B Topic: Microeconomics: The Allocation of Scarce Resources Skill: Analtical thinkin! Status: "ld ,) The price of a !ood is A) alwas e6ual to the cost of producin! the !ood. B) ne%er affected & the num&er of &uers and sellers. C) usuall determined in a market. D) 'one of the a&o%e. Answer: C Topic: Microeconomics: The Allocation of Scarce Resources Skill: Analtical thinkin! Status: "ld 7) The flu %accination e2ample in Section 1.1 of the te2t&ook is an e2ample of how polic makers ma cope with A) scarcit of medical treatment. B) scarcit of patients. C) scarcit of polic makers. D) answerin! the 6uestion of how to produce. Answer: A Topic: Microeconomics: The Allocation of Scarce Resources Skill: Application of knowled!e Status: "ld

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8) 4ho or what is responsi&le for the allocation of scarce resources into the production of most !oods in the 9.S.5 A) the American !o%ernment B) the 9' C) the ederal Reser%e Bank D) markets and prices Answer: D Topic: Microeconomics: The Allocation of Scarce Resources Skill: Application of knowled!e Status: "ld 1+) 4hich one of the followin! is '"T a ke tradeoff a societ faces5 A) 4ho !ets the !oods and ser%ices B) 4ho produces the !oods and ser%ices C) 4hich !oods and ser%ices to produce D) ;ow to produce Answer: B Topic: Trade"ffs Skill: Analtical thinkin! Status: "ld 11) An automo&ile manufacturer is trin! to make decisions a&out usin! more workers or more e6uipment. This &elon!s to the tradeoff A) 4hich !oods and ser%ices to produce. B) ;ow to produce. C) 4ho !ets the !oods and ser%ices. D) 4ho produces the !oods and ser%ices. Answer: B Topic: Trade"ffs Skill: Application of knowled!e Status: "ld 1#) 0ncome ta2 on the wealth to finance the welfare for the poor causes income redistri&ution. This is an e2ample for the tradeoff A) 4hich !oods and ser%ices to produce. B) ;ow to produce. C) 4ho !ets the !oods and ser%ices. D) 4ho produces the !oods and ser%ices. Answer: C Topic: Trade"ffs Skill: Application of knowled!e Status: "ld

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1$) 0n ear #++7/ 1$$( 1 $$( million l&s of milk was produced and sold in 9.S. This is A) the decision of the 9.S. department depa rtment of a!riculture. B) 6uantit determined & the interactions in the market. C) the ma2imum amount the producers could produce. D) what consumers needed. Answer: B Topic: 4ho Makes the Decisions Skill: Application of knowled!e Status: "ld For the following, please answer "True" "True" or "False" and explain why.

1() 9nder most circumstances/ the application of ta2es on !oods will onl affect who !ets the !oods. Answer: alse. Ta2es Ta2es will affect which !oods are produced/ how !oods are produced/ and who !ets the !oods. Topic: Microeconomics: The Allocation of Scarce Resources Skill: Application of knowled!e Status: "ld 1) Most modern financial centers use computers to match &uers and sellers. This a&sence of personal contact contradicts the definition of a market. Answer: alse. Buers and sellers sellers need not meet durin! a market transaction transaction since a market is is not tied to a particular location. Topic: ;ow -rices Determine Allocations Skill: Application of knowled!e Status: "ld 13) 2plain how a market helps determine which !oods and ser%ices will &e produced/ how to produce them/ and who !ets them. Answer: A market market promotes interaction &etween consumers and firms. This This interaction will result in prices that influence the decisions of consumers and firms. Topic: ;ow -rices Determine Allocations Skill: 4ritten 4ritten and oral communication Status: "ld 1.# Models 1) The purpose of makin! assumptions in economic model &uildin! is to A) force the model to ield the correct answer. answer. B) minimi

#) instein was 6uoted sain! =%erthin! should &e made as simple as possi&le/ &ut not simpler.= simpler.= 4hen it comes to economic models this means that A) models shouldn>t &e too comple2. B) models shouldn>t &e too simple. C) models should ha%e a le%el of a&straction appropriate to the topic in%esti!ated. D) All of the a&o%e. Answer: D Topic: Models Skill: Analtical thinkin! Status: "ld $) 0f a model>s predictions are correct/ then A) its assumptions must ha%e &een correct. B) it is pro%en to &e correct. C) Both A and B a&o%e. D) 'one of the a&o%e. Answer: D Topic: Models Skill: Analtical thinkin! Status: "ld () conomists tend to ?ud!e a model &ased upon A) the realit of its assumptions. B) the accurac of its predictions. C) its simplicit. D) its comple2it. Answer: B Topic: Testin! Theories Theorie s Skill: Analtical thinkin! Status: "ld ) 4hich of the followin! is an e2ample of a normati%e statement5 A) A hi!her price for a !ood causes people to want to &u &u  less of that !ood. B) A lower price for a !ood causes people peo ple to want to &u more of that !ood. C) To To make the !ood a%aila&le to more people/ a lower price should &e set. D) 0f ou consume this !ood/ ou will &e &etter off. Answer: C Topic: -ositi%e @ersus @ersus 'ormati%e 'ormati% e Skill: Application of knowled!e Status: "ld

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3) %er economic model should include mone as a %aria&le. This statement is A) true/ &ecause e%er transaction in the econom uses mone. B) true/ &ecause the federal reser%e is %er important. C) false/ &ecause some transactions in the econom are transacted without mone. D) false/ &ecause a model can !et unnecessaril comple2 if it includes mone. Answer: D Topic: Models Skill: Analtical thinkin! Status: "ld ,) 4hich of the followin! is an e2ample of a normati%e statement5 A) Since this !ood is &ad for ou/  ou/ ou should not consume it. B) This !ood has &ad health effects. C) 0f ou consume this !ood/ ou will !et sick. D) -eople usuall !et sick after consumin! this !ood. Answer: A Topic: -ositi%e @ersus @ersus 'ormati%e 'ormati% e Skill: Application of knowled!e Status: "ld 7) 4hich of the followin! is an e2ample of a positi%e statement5 A) Since this !ood is &ad for ou/  ou/ ou should not consume it. B) 0f this !ood is &ad for ou/ ou should not consume it. C) 0f ou consume this !ood/ ou will !et sick. D) 'one of the a&o%e. Answer: C Topic: -ositi%e @ersus @ersus 'ormati%e 'ormati% e Skill: Application of knowled!e Status: "ld 8) A theor statin! that indi%iduals make purchasin! decisions &ased on tastes which chan!e randoml at random inter%als is not useful &ecause A) it is not possi&le to test the predictions of the model. B) tastes are not the onl factor influencin! &eha%ior. &eha%ior. C) the model is too simplistic. D) the predictions of such a model would &e incorrect. Answer: A Topic: Testin! Theories Theorie s Skill: Analtical thinkin! Status: "ld



1+) =0f fines for speedin! when dri%in! increase/ fewer accidents will occur= is an e2ample of an) A) positi%e statement. B) normati%e statement. C) ne!ati%e statement. D) in%erse statement. Answer: A Topic: -ositi%e @ersus @ersus 'ormati%e 'ormati% e Skill: Application of knowled!e Status: "ld 11) =o%ernment should impose stricter re!ulations on oil drillin!= is an e2ample of a A) normati%e statement. B) positi%e statement. C) ne!ati%e statement. D) normal statement. Answer: A Topic: -ositi%e @ersus @ersus 'ormati%e 'ormati% e Skill: Application of knowled!e Status: "ld 1#) 0n the suppldemand models to anal choices. B) importance of makin! personal &ud!et. C) ma2imi
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1() 4hich of the followin! statements is a normati%e statement5 A) Minimum wa!e reduces emploment. B) Minimum wa!es causes surplus in la&or market. C) Minimum wa!e will impro%e the li%in! of ?unior works more than senior workers. D) Minimum wa!e should &e welcomed & the low income class. Answer: D Topic: -ositi%e @ersus @ersus 'ormati%e 'ormati% e Skill: Application of knowled!e Status: "ld 1) 0ncrease in price of a !ood !oo d will increase consumers> demand. This is an) A) positi%e statement. B) true statement. C) in%erse statement. D) normati%e statement. Answer: A Topic: -ositi%e @ersus @ersus 'ormati%e 'ormati% e Skill: Application of knowled!e Status: "ld 13) Trade &arriers should &e remo%ed to promote the welfare of the countr. This is an) A) positi%e statement. B) ne!ati%e statement. C) in%erse statement. D) normati%e statement. Answer: D Topic: -ositi%e @ersus @ersus 'ormati%e 'ormati% e Skill: Application of knowled!e Status: "ld For the following, please answer "True" "True" or "False" and explain why.

1,) 'ormati%e analsis offers decision makers the most %alua&le information when choosin! amon! alternati%es. Answer: alse. 'ormati%e analsis states su&?ecti%e !oals &ut not how those !oals can &e achie%ed. To choose amon! alternati%es/ decision makers use positi%e analsis. Topic: -ositi%e @ersus @ersus 'ormati%e 'ormati% e Skill: Analtical thinkin! Status: "ld 17) 0f a model fits realit &ut doesn>t !enerate testa&le predictions/ it is of little %alue to economists. Answer: True. 0f the model doesn>t deli%er deli%er testa&le predictions/ it cannot &e tested a!ainst competin! models. Topic: Testin! Theories Theorie s Skill: Analtical thinkin! Status: "ld 7 Copri!ht * #+1, -earson ducation/ 0nc.


18) 0f actual e2perience supports two competin! theories/ then &oth theories are pro%en to &e true. Answer: alse. 'either theor can &e re?ected/ re?ected/ &ut if the are competin!/ competin!/ then the test was inconclusi%e. Topic: Testin! Theories Theorie s Skill: Analtical thinkin! Status: "ld #+) e!islators ar!ue that a minimum wa!e law is instituted to help poo r people. conomists can attack the minimum wa!e law on two fronts. irst/ some ar!ue that !o%ernment should not help the poor. Second/ some ar!ue that minimum wa!e laws actuall hurt the poo r &ecause it creates unemploment. 4hich ar!ument is normati%e and which is positi%e5 Answer: An opinion a&out the role of !o%ernment is a normati%e statement. An o&ser%ation a&out the impact of a law is a positi%e statement. Topic: -ositi%e @ersus @ersus 'ormati%e 'ormati% e Skill: Application of knowled!e Status: "ld 1.$ 9ses of Microeconomic Models 1) conomic polic of the !o%ernment is often &ased on A) microeconomic models. B) educated !uessin!. C) intuiti%e reasonin!. D) hints. Answer: A Topic: 9ses of Microeconomic Models Skill: Analtical thinkin! Status: "ld #) Microeconomic models are used to A) make predictions. B) e2plain reallife phenomena. C) e%aluate polic alternati%es. D) All of the a&o%e. Answer: D Topic: 9ses of Microeconomic Models Skill: Analtical thinkin! Status: "ld



$) A microeconomic model CA''"T &e used to A) e%aluate the impact of a price chan!e on a firm>s re%enue. B) predict the impact on a rise of the minimum wa!e on unemploment. C) e%aluate the fairness of the proposal to nationalis tickets. Answer: C Topic: 9ses of Microeconomic Models Skill: Application of knowled!e Status: "ld () The analsis of the competition &etween Apple and Samsun! in the smartphone market is &ased on A) microeconomic model. B) educated !uessin!. C) intuiti%e reasonin!. D) consumer sur%es. Answer: A Topic: 9ses of Microeconomic Models Skill: Application of knowled!e Status: "ld For the following, please answer "True" "True" or "False" and explain why.

) Microeconomics can &e used & !o%ernments to predict the impacts of a polic and su!!est solutions to pro&lems. Answer: True. Microeconomics models can &e used to e2amine the effects effects of a polic/ polic/ and can pro%ide insi!ht into possi&le solutions to economics pro&lems. pro&lems. Topic: 9ses of Microeconomic Models Skill: Analtical thinkin! Status: "ld 3) "ne model in economics is the permanent income hpothesis/ which &asicall states that a household>s e2penditures will not react to a chan!e in income unless that chan!e in income is %iewed as &ein! permanent. ;ow would ou use this model to predict the e2penditure patterns o%er the course of a ear of a real estate a!ent who onl sells homes durin! the months of April throu!h ul5 Answer: The a!ent will not consume all of her income when it is is earned. She knows that her pachecks will not &e comin! durin! Au!ust throu!h throu!h March. As a result/ result/ some of her summer income will &e sa%ed for use durin! those months. Topic: 9ses of Microeconomic Models Skill: Application of knowled!e Status: "ld

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,) "ne million automo&iles ha%e a defect de fect that could cause the car to e2plodeE howe%er/ onl one of those cars will actuall e2plode. 'o&od knows which one car it is. 4hen the car does e2plode/ the %ictim>s famil will sue the automaker for F1 million and win. The defect costs F# per car to repair. repair. 4hat does economics predict a&out the automaker>s decision to repair the defect5 Answer: Correctin! the defect will cost F# million. 'ot correctin! the defect will onl onl cost F1 million. conomics predicts that the automaker will not correct the defect. Topic: 9ses of Microeconomic Models Skill: Application of knowled!e Status: "ld


Test Bank for Microeconomics Theory and Applications With Calculus 4th Edition by Perloff

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