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31) When Delta decides to quit lying to Lithuania, it directly answers the ________ question.
A) what
B) why
C) for whom
D) how
E) when
Skill: Level 2: Using deinitions
Section: Checkpoint 1.1
Status: Old
AACSB: Relective thinking
32) The question of "What goods and services get produced?" most closely relates to which
of the following issues?
A) the distribution of goods and services in the economy
B) producing goods and services in the least costly manner
C) building a missile defense system, or putting a computer in every elementary school
classroom
D) obtaining specialized training to increase one's income
E) taxing high income workers to give payments to poor households
Skill: Level 3: Using models
Section: Checkpoint 1.1
Status: Old
AACSB: Relective thinking
33) When a home builder decides to computerize all of its production schedules, it directly
answers the ________ question.
A) for whom
B) what
C) where
D) how
E) why
Skill: Level 2: Using deinitions
Section: Checkpoint 1.1
Status: Old
AACSB: Relective thinking
11
34) When Fresh Express Salads decides to mechanically pick all of its lettuce, it directly
answers the ________ question.
A) what
B) how
C) for whom
D) where
E) when
Skill: Level 2: Using deinitions
Section: Checkpoint 1.1
Status: Old
AACSB: Relective thinking
35) When the power company decides to use manpower to bury its lines, it directly answers
the ________ question.
A) what
B) for whom
C) how
D) why
E) when
Skill: Level 2: Using deinitions
Section: Checkpoint 1.1
Status: Old
AACSB: Relective thinking
36) The question of "How are goods and services produced?" most closely addresses which
of the following issues?
A) Should Ford build SUVs or luxury cars?
B) Should Ford use expensive industrial robots or inexpensive Mexican autoworkers to
produce SUVs?
C) Should contractors build residential housing or shopping malls?
D) Is income distributed fairly in the United States?
E) Why are Christmas trees popular only in December?
Skill: Level 2: Using deinitions
Section: Checkpoint 1.1
Status: Revised
AACSB: Relective thinking
12
37) Of the three major economic questions, which of the following is the best example of a
"How?" question?
A) Should we produce more heavy leece coats?
B) Should we collect tolls on turnpikes using human toll collectors or mechanized toll
machines?
C) Should we build log homes or build factories from bricks?
D) Should we spend more on health care?
E) Should we eat more oatmeal?
Skill: Level 2: Using deinitions
Section: Checkpoint 1.1
Status: Old
AACSB: Relective thinking
38) Which economic question depends on the incomes that people earn and the prices they
pay for goods and services?
A) What?
B) How?
C) For whom?
D) Why?
E) Where?
Skill: Level 1: Deinition
Section: Checkpoint 1.1
Status: Old
AACSB: Relective thinking
39) When the federal government decides to pay senators more than it pays soldiers, it
answers the ________ question.
A) why
B) how
C) for whom
D) what
E) where
Skill: Level 2: Using deinitions
Section: Checkpoint 1.1
Status: Old
AACSB: Relective thinking
13
40) When a third string NFL quarterback earns more than a police oicer, society answers
the ________ question.
A) for whom
B) what
C) how
D) why
E) social interest vs. self-interest
Skill: Level 2: Using deinitions
Section: Checkpoint 1.1
Status: Old
AACSB: Relective thinking
41) When unskilled teens earn less than college graduates, society answers the ________
question.
A) how
B) what
C) for whom
D) why
E) social interest versus self-interest
Skill: Level 2: Using deinitions
Section: Checkpoint 1.1
Status: Old
AACSB: Relective thinking
42) Canada has nationalized health care, so that everyone, regardless of their ability to pay,
has some access to health care. Based on this observation, Canada has decided that
"everyone, regardless of their ability to pay" is the answer to what microeconomic
question?
A) What type of health care will be produced and in what quantity?
B) How will health care be produced?
C) For whom will health care be produced?
D) Why will we ofer health care?
E) Must we ofer health care?
Skill: Level 3: Using models
Section: Checkpoint 1.1
Status: Old
AACSB: Analytical thinking
14
43) Choices that are best for the individuals that make them are choices in pursuit of
A) the social interest.
B) eiciency.
C) incentives.
D) self-interest.
E) equity.
Skill: Level 1: Deinition
Section: Checkpoint 1.1
Status: Old
AACSB: Relective thinking
44) Self interest
A) relects choices that are best for society as a whole.
B) relects choices that are best for the individual who makes them.
C) has nothing to do with determining what goods are produced.
D) occurs only when wants exceed available resources.
E) cannot be used to determine how goods are produced.
Skill: Level 1: Deinition
Section: Checkpoint 1.1
Status: Old
AACSB: Relective thinking
45) Choices that are best for the society as a whole are choices in pursuit of
A) answering the "how" question.
B) the social interest.
C) self-interest.
D) incentives.
E) answering the "for whom" question.
Skill: Level 1: Deinition
Section: Checkpoint 1.1
Status: Old
AACSB: Relective thinking
15
46) The characteristic from which all economic problems arise is
A) political decisions.
B) providing a minimal standard of living for every person.
C) how to make a proit.
D) hunger.
E) scarcity.
Skill: Level 2: Using deinitions
Section: Checkpoint 1.1
Status: Old
AACSB: Relective thinking
47) All economic questions and problems arise from
A) the fact that society has more than it needs.
B) turmoil in the stock market.
C) the unequal distribution of income.
D) a society's wants exceeding what its scarce resources can produce.
E) the diference between self-interest and social interest.
Skill: Level 1: Deinition
Section: Checkpoint 1.1
Status: Old
AACSB: Relective thinking
48) Scarcity results from the fact that
A) people's wants exceed the resources available to satisfy them.
B) not all goals are desirable.
C) we cannot answer the major economic questions.
D) choices made in self-interest are not always in the social interest.
E) the population keeps growing.
Skill: Level 1: Deinition
Section: Checkpoint 1.1
Status: Revised
AACSB: Relective thinking
16
49) To economists, scarcity means that
A) limited wants cannot be satisied by the unlimited resources.
B) a person looking for work is not able to ind work.
C) the number of people without jobs rises when economic times are bad.
D) there can never be answers to the what, how or for whom questions.
E) unlimited wants cannot be satisied by the limited resources.
Skill: Level 1: Deinition
Section: Checkpoint 1.1
Status: Old
AACSB: Relective thinking
50) Which of the following statements is true regarding scarcity?
A) Scarcity afects poorer countries only.
B) An economy experiences scarcity only when the incomes of its citizens decline.
C) Poor people experience scarcity more often than do rich people.
D) All citizens in a wealthy economy experience scarcity.
E) Scarcity could be overcome if people would make all choices in the social interest.
Skill: Level 2: Using deinitions
Section: Checkpoint 1.1
Status: Old
AACSB: Relective thinking
51) People must make choices because
A) most people enjoy shopping.
B) of scarcity.
C) there are many goods available.
D) the question "What goods and services are produced?" is not adequately answered.
E) making choices is in the social interest.
Skill: Level 2: Using deinitions
Section: Checkpoint 1.1
Status: Old
AACSB: Relective thinking
17
52) Which of the following is a microeconomic issue?
A) Why has unemployment risen nationwide?
B) Why has economic growth been rapid in China?
C) What is the impact on the quantity of Pepsi purchased if consumers' tastes change in
favor of non-carbonated drinks?
D) Why is the average income lower in Africa than in Latin America?
E) Why did overall production increase within the United States last year?
Skill: Level 1: Deinition
Section: Checkpoint 1.1
Status: Old
AACSB: Relective thinking
53) Microeconomics includes the study of
A) how countries decide to fund their budget deicits.
B) the choices that individuals and businesses make.
C) how a nation promotes economic growth.
D) the efect on the national economy of the choices that individuals make.
E) the overall amount of production within the economy.
Skill: Level 1: Deinition
Section: Checkpoint 1.1
Status: Old
AACSB: Relective thinking
54) The question "Should we produce LCD televisions or computer monitors?" is an
example of a ________ question.
A) what
B) how
C) for whom
D) where
E) why
Skill: Level 2: Using deinitions
Section: Checkpoint 1.1
Status: Old
AACSB: Relective thinking
18
55) When Ferrari decides to produce 1,200 360 Modenas each year, Ferrari is answering
the ________ question.
A) for whom
B) how
C) what
D) why
E) scarcity
Skill: Level 2: Using deinitions
Section: Checkpoint 1.1
Status: Old
AACSB: Relective thinking
56) Whether a company produces ishing rods mostly by hand or using high-tech machinery
is a question of
A) "For whom will goods be produced?"
B) "When will the goods be produced?"
C) "Where will the goods be produced?"
D) "How will the goods be produced?"
E) "Why will the goods be produced?"
Skill: Level 2: Using deinitions
Section: Checkpoint 1.1
Status: Old
AACSB: Relective thinking
57) When a landscaping company decides to use drafting software and computers instead
of hiring designers to draw design plans by hand, it is answering the ________ question.
A) how
B) what
C) for whom
D) opportunity cost
E) why
Skill: Level 2: Using deinitions
Section: Checkpoint 1.1
Status: Old
AACSB: Relective thinking
19
58) The question "Should we produce houses using bricks or wood?" is an example of a
________ question.
A) what
B) how
C) for whom
D) where
E) why
Skill: Level 2: Using deinitions
Section: Checkpoint 1.1
Status: Old
AACSB: Relective thinking
59) The question "Should economics majors or sociology majors earn more after they
graduate?" is an example of a ________ question.
A) what
B) how
C) for whom
D) where
E) why
Skill: Level 2: Using deinitions
Section: Checkpoint 1.1
Status: Old
AACSB: Relective thinking
60) If a decision is made and it is the best choice for society, the decision is said to be
A) a valid economic choice.
B) made in self-interest.
C) made in social interest.
D) consistent with scarcity.
E) a want-maximizing choice.
Skill: Level 2: Using deinitions
Section: Checkpoint 1.1
Status: Old
AACSB: Relective thinking
20
