Principles of MICROeconomics 9th Edition Mankiw Test Bank
Complete Test Bank Principles of MICROeconomics 9th Edition Mankiw Questions & Answers with rationales (Chapter 1-22)
PDF File
All Pages
All Chapters
Grade A+
Ch 01: Ten Principles of Economics Page 1 Principles of MICROeconomics 9th Edition Mankiw Test Bank True / False 1. Scarcity means that there is less of a good or resource available than people wish to have. a. True b. False ANSWER: True 2. Economics is the study of how evenly goods and services are distributed within society. a. True b. False ANSWER: False 3. Economics is the study of how society allocates its unlimited resources. a. True b. False ANSWER: False 4. Because resources are scarce, a society cannot give all individuals the standard of living to which each aspires. a. True b. False ANSWER: True 5. Equality means distributing society’s resources in the most efficient manner. a. True b. False ANSWER: False 6. Economists study how people make decisions. a. True b. False ANSWER: True 7. With careful planning, we can usually get something that we like without having to give up something else that we like. a. True b. False ANSWER: False 8. Choosing not to attend a concert so that you can study for your exam is an example of a tradeoff. a. True b. False ANSWER: True 9. The classic tradeoff between “guns and butter” states that when a society spends more on national d efense, it has less to spend on consumer goods to raise the standard of living. Ch 01: Ten Principles of Economics Page 2 Principles of MICROeconomics 9th Edition Mankiw Test Bank a. True b. False ANSWER: True 10. Efficiency means everyone in the economy should receive an equal share of the goods and services produced. a. True b. False ANSWER: False 11. Equality refers to how the pie is divided, and efficiency refers to the size of the economic pie. a. True b. False ANSWER: True 12. Government policies that improve equality usually increase efficiency at the same time. a. True b. False ANSWER: False 13. Using income tax revenue to fund the welfare system illustrates the conflict between efficiency and equality. a. True b. False ANSWER: True 14. An individual deciding how to allocate her limited time is dealing with both scarcity and trade -offs. a. True b. False ANSWER: True 15. The cost of an action is meas ured in terms of foregone opportunities. a. True b. False ANSWER: True 16. Tuition is the single -largest cost of attending college for most students. a. True b. False ANSWER: False 17. If wages for accountants rose, then accountants’ leisure time would have a lower opportun ity cost. a. True b. False ANSWER: False Ch 01: Ten Principles of Economics Page 3 Principles of MICROeconomics 9th Edition Mankiw Test Bank 18. A marginal change is a small incremental adjustment to an existing plan of action. a. True b. False ANSWER: True 19. An increase in the marginal cost of an activity necessarily means that people will no longer engage in any of th at activity. a. True b. False ANSWER: False 20. If the average cost of transporting a passenger on the train from Chicago to St. Louis is $75, it would be irrational for the railroad to allow any passenger to ride for less than $75. a. True b. False ANSWER: False 21. The fa ct that people are willing to pay much more for a diamond, which is not needed for survival, than they are willing to pay for a cup of water, which is needed for survival, is an example of irrational behavior. a. True b. False ANSWER: False 22. A rational decisionm aker takes an action if and only if the marginal cost exceeds the marginal benefit. a. True b. False ANSWER: False 23. Suppose one county in Missouri decides it wants to reduce alcohol consumption, so the county passes a law that raises the price of a bottle of bee r by $1. As a result, people drive to other counties to drink alcohol, which results in an increase in drunk driving. This illustrates the principle that people respond to incentives. a. True b. False ANSWER: True 24. A tax on gasoline is an incentive that encourag es people to drive smaller more fuel-efficient cars. a. True b. False ANSWER: True 25. To say people respond to incentives means that people may alter their decisions when the costs and benefits of an action change. a. True b. False ANSWER: True Ch 01: Ten Principles of Economics Page 4 Principles of MICROeconomics 9th Edition Mankiw Test Bank 26. One of the effects of gas prices rising from about $2 to about $4 per gallon was airlines ordering new, fuel-efficient aircraft. a. True b. False ANSWER: True 27. Trade allows each person to specialize in the activities he or she does best, thus increasing each individual's productivity. a. True b. False ANSWER: True 28. Trade with any nation can be mutually beneficial. a. True b. False ANSWER: True 29. Trade can make everyone better off except in the case where one person is better at doing everything. a. True b. False ANSWER: False 30. The invisible hand ensures that economic prosperity is distributed equally. a. True b. False ANSWER: False 31. A market economy cannot produce a socially desirable outcome because individuals are motivated by their own selfish interests. a. True b. False ANSWER: False 32. Communist countries worked o n the premise that government officials were in the best position to allocate the economy’s scarce resources. a. True b. False ANSWER: True 33. The government can potentially improve market outcomes if market inequalities or market failure exists. a. True b. False ANSWER : True
The benefits of buying summaries with Stuvia:
Guaranteed quality through customer reviews
Stuvia customers have reviewed more than 700,000 summaries. This how you know that you are buying the best documents.
Quick and easy check-out
You can quickly pay through credit card or Stuvia-credit for the summaries. There is no membership needed.
Focus on what matters
Your fellow students write the study notes themselves, which is why the documents are always reliable and up-to-date. This ensures you quickly get to the core!
Frequently asked questions
What do I get when I buy this document?
You get a PDF, available immediately after your purchase. The purchased document is accessible anytime, anywhere and indefinitely through your profile.
Satisfaction guarantee: how does it work?
Our satisfaction guarantee ensures that you always find a study document that suits you well. You fill out a form, and our customer service team takes care of the rest.
Who am I buying these notes from?
Stuvia is a marketplace, so you are not buying this document from us, but from seller gradexam. Stuvia facilitates payment to the seller.
Will I be stuck with a subscription?
No, you only buy these notes for $16.99. You're not tied to anything after your purchase.
