CHAPTER 17
Robinson Crusoe
Two Perspectives on Microeconomics
MULTIPLE CHOICE QUESTIONS
125. The text distinguishes between two perspectives in microeconomics. These two
perspectives are
a. Republican and Democrat
b. Libertarian and Mercantilist
c. Progressive and Neoclassical
d. Mercantilist and Capitalist
126. What is microeconomics?
a. microeconomics is the study of how individual consumers, firms, and workers make
decisions about production and consumption.
b. microeconomics is the study of how individual consumers, firms, and workers make
decisions about the aggregate economy.
c. microeconomics is the study of how the economy as a whole behaves.
d. microeconomics is the study of business cycles, inflation and economic growth.
127. What role should the government play in the economy according to neoclassical
economists?
a. neoclassical economists believe the government should intervene to stabilize business
cycles.
b. neoclassical economists believe the government should not intervene to stabilize business
cycles.
c. neoclassical economists believe the government should intervene in order to increase
social equality.
d. neoclassical economists believe the government should not intervene in the economy
except in the area of health care.
128. Which of the following is NOT an assumption of the Robinson Crusoe economy presented
by Milton Friedman?
a. each household in the economy is an independent producer.
b. each household exchanges its goods and services for other goods and services produced
by other households.
c. each household exchanges goods and services freely and voluntarily.
d. each household pays a fixed percentage of income to the government.
129.
a.
market by means of their consumer purchases.
b.
campaign contributions.
c. s that consumers influence business activities through
bribes and payoffs.
d.
130. The text mentions several well-known neoclassical and progressive economists. Which of
the following is a true statement?
a. Milton Friedman is a well-known progressive economist.
b. Robinson Crusoe is a well-known neoclassical economist.
c. John Maynard Keynes is a well-known progressive economist.
d. Karl Marx is a well-known neoclassical economist
131. What is the basic policy conclusion of neoclassical economics
a. free-market capitalism in inherently unstable and occasionally requires government
intervention.
b. free-market capitalism works well as long as government does not intervene in the
economy.
c. free-market capitalism is exploitative and oppressive and should be replaced by a more
equitable system.
d. free-market capitalism is imperfect but can be reformed to improve social outcomes.
132. The basic unit of analysis in neoclassical economics is
a. the util
b. the economy
c. the individual
d. relationships between groups in the economy.
133. The basic unit of analysis in progressive economics is
a. the util
b. the economy
c. the individual
d. relationships between groups in the economy.
134. Progressive economists identify the relationships between groups in a economy as
a. fundamentally in harmony.
b. often in conflict.
c. less important than relationships between individuals.
d. united in their opposition to government.