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Chapter 01 - Limits, Alternatives, and Choices (+ Appendix)
1. For economists, the word "utility" means:
2. In economics, the pleasure, happiness, or satisfaction received from a product is called:
Chapter 01 - Limits, Alternatives, and Choices (+ Appendix)
3. When economists say that people act rationally in their self interest, they mean that
individuals:
4. According to Emerson: "Want is a growing giant whom the coat of Have was never large
enough to cover." According to economists, "Want" exceeds "Have" because:
5. According to economists, economic self-interest:
Chapter 01 - Limits, Alternatives, and Choices (+ Appendix)
6. Joe sold gold coins for $1000 that he bought a year ago for $1000. He says, "At least I
didn't lose any money on my financial investment." His economist friend points out that in
effect he did lose money, because he could have received a 3 percent return on the $1000 if he
had bought a bank certificate of deposit instead of the coins. The economist's analysis in this
case incorporates the idea of:
7. A person should consume more of something when its marginal:
8. Economics may best be defined as the:
Chapter 01 - Limits, Alternatives, and Choices (+ Appendix)
9. The study of economics is primarily concerned with:
10. The economic perspective entails:
11. Purposeful behavior suggests that:
Chapter 01 - Limits, Alternatives, and Choices (+ Appendix)
12. Purposeful behavior means that:
13. Economics involves marginal analysis because:
14. You should decide to go to a movie:
Chapter 01 - Limits, Alternatives, and Choices (+ Appendix)
15. Marginal costs exist because:
16. The assertion that "There is no free lunch" means that:
17. Consumers spend their incomes to get the maximum benefit or satisfaction from the goods
and services they purchase. This is a reflection of:
Chapter 01 - Limits, Alternatives, and Choices (+ Appendix)
18. If someone produced too much of a good, this would suggest that:
19. Even though local newspapers are very inexpensive, people rarely buy more than one of
them each day. This fact:
20. In deciding whether to study for an economics quiz or go to a movie, one is confronted by
the idea(s) of:
Chapter 01 - Limits, Alternatives, and Choices (+ Appendix)
21. Which one of the following expressions best states the idea of opportunity cost?
22. Suppose that a university decides to spend $1 million to upgrade personal computers and
scientific equipment for faculty rather than spend $1 million to expand parking for students.
This example illustrates:
23. Which of the following most closely relates to the idea of opportunity costs?
Chapter 01 - Limits, Alternatives, and Choices (+ Appendix)
24. Economists contend that most economic decisions are:
25. Alex sees that his neighbors' lawns all need mowing. He offers to provide the service in
exchange for a wage of $20 per hour. Some neighbors accept Alex's offer and others refuse.
Economists would describe Alex's behavior as:
26. Kara was out jogging and despite being tired, decided to run one more mile. Based on her
actions, economists would conclude that Kara:
Chapter 01 - Limits, Alternatives, and Choices (+ Appendix)
27. An economic hypothesis:
28. Which of the following terms implies the least degree of confidence in an economic
generalization?
29. Which of the following terms implies the greatest degree of confidence in an economic
generalization?
Chapter 01 - Limits, Alternatives, and Choices (+ Appendix)
30. A well-tested economic theory is often called:
31. The scientific method is:
32. The process by which economists test hypotheses against facts to develop theories,
principles, and models is called:
Chapter 01 - Limits, Alternatives, and Choices (+ Appendix)
33. Economic theories:
34. Which of the following is a correct statement?
35. In constructing models, economists:
Chapter 01 - Limits, Alternatives, and Choices (+ Appendix)
36. The Latin term "ceteris paribus" means:
37. The basic purpose of the other-things-equal assumption is to:
38. Suppose an economist says that "Other things equal, the lower the price of bananas, the
greater the amount of bananas purchased." This statement indicates that:
Chapter 01 - Limits, Alternatives, and Choices (+ Appendix)
39. The term "other things equal" means that:
40. Kelly works at an ice cream shop and observes that the number of people buying ice
cream varies greatly from day to day. For a couple of weeks she has recorded the number of
people at the shop each day, as well as the daily temperature. If Kelly is using the scientific
method to better understand ice cream buying habits, her next step is to:
41. Macroeconomics approaches the study of economics from the viewpoint of:
Chapter 01 - Limits, Alternatives, and Choices (+ Appendix)
42. Which of the following is associated with macroeconomics?
43. The problems of aggregate inflation and unemployment are:
44. Which of the following statements pertains to macroeconomics?
Chapter 01 - Limits, Alternatives, and Choices (+ Appendix)
45. Macroeconomics can best be described as the:
46. Microeconomics is concerned with:
47. Microeconomics:
Chapter 01 - Limits, Alternatives, and Choices (+ Appendix)
48. Which of the following is a microeconomic statement?
49. Which of the following statements is true?
50. A normative statement is one that:
Chapter 01 - Limits, Alternatives, and Choices (+ Appendix)
51. A positive statement is one which is:
52. Which of the following is a positive statement?
53. Normative statements are concerned primarily with:
Chapter 01 - Limits, Alternatives, and Choices (+ Appendix)
54. A positive statement is concerned primarily with:
55. "Economics is concerned with how individuals, institutions, and society make optimal
choices under conditions of scarcity." This statement is:
56. Ben says that "An increase in the tax on beer will raise its price." Holly argues that "Taxes
should be increased on beer because college students drink too much." We can conclude that:
Chapter 01 - Limits, Alternatives, and Choices (+ Appendix)
57. "Macroeconomics is the part of economics concerned with individual units such as a
person, a household, a firm, or an industry." This statement is:
58. Brinley says that "Gas prices are rising because there aren't enough oil refineries." Katie
argues that "Gas prices are rising because of the growing demand for gasoline from China and
India." We can conclude that:
59. The economizing problem is:
