Economics and Previous Edition

Topics: Economics, Economic problem, Critical thinking Pages: 5 (791 words) Published: October 13, 2013
Economics Today, 16e (Miller)
Chapter 1 The Nature of Economics

1.1 The Power of Economic Analysis

1) The economic way of thinking will help you
A) make decisions in financing your home.
B) decide whether the U.S. government should encourage or discourage immigration. C) make better decisions concerning your education.
D) all of the above
Answer: D
Diff: 1
Topic: 1.1 The Power of Economic Analysis
AACSB: Analytic skills
Question Status: Previous Edition

2) Economic analysis is used
A) only in economics classrooms.
B) only by business people.
C) only by policy makers.
D) in all decision making.
Answer: D
Diff: 1
Topic: 1.1 The Power of Economic Analysis
AACSB: Analytic skills
Question Status: Previous Edition

3) Economic analysis is
A) a tool that can aid all decision making.
B) a tool that can be used in only macroeconomics.
C) a tool that can be used in only microeconomics.
D) an unnecessary complication to decision making.
Answer: A
Diff: 1
Topic: 1.1 The Power of Economic Analysis
AACSB: Analytic skills
Question Status: Previous Edition

4) What is the purpose of knowing "the economic way of thinking"? Answer: The economic way of thinking provides a framework for analyzing solutions to economic problems. Since economic problems confront all of us much of the time, knowledge of economics will enable one to arrive at better decisions, and enable one to evaluate many public policy questions in a systematic manner. Diff: 1

Topic: 1.1 The Power of Economic Analysis
AACSB: Analytic skills
Question Status: Previous Edition
5) What does scarcity have to do with the fact that people must make choices? Answer: Scarcity implies that people cannot have everything they want. This implies that ways must be found to determine which of the many goods that people want will actually be produced. Further, since any person cannot have everything he or she wants, the person must decide which specific things to acquire. That is, the person must make choices. Diff: 2

Topic: 1.1 The Power of Economic Analysis
AACSB: Analytic skills
Question Status: Previous Edition

6) What is economics and what does it try to explain?
Answer: Economics is the study of how people allocate their limited resources in an attempt to satisfy their unlimited wants. Therefore, it is the study of how people make choices. Economics tries to explain real-world behavior, especially as it relates to interactions of people confronting scarcity. Diff: 1

Topic: 1.1 The Power of Economic Analysis
AACSB: Analytic skills
Question Status: Previous Edition

1.2 Defining Economics

1) Economics is best defined as the
A) study of how people make choices to satisfy their wants.
B) study of individual self-interests.
C) study of how government can most efficiently raise funds by taxation. D) process by which goods are sold in free markets.
Answer: A
Diff: 1
Topic: 1.2 Defining Economics
AACSB: Analytic skills
Question Status: Previous Edition

2) Economics can be described as the study of how people use ________ resources to satisfy ________ wants. A) unlimited; unlimited
B) unlimited; limited
C) limited; unlimited
D) limited; limited
Answer: C
Diff: 1
Topic: 1.2 Defining Economics
AACSB: Analytic skills
Question Status: Previous Edition
3) Which statement most accurately defines economics?
A) Economics is the study of how people make money.
B) Economics is the study of how people make choices to satisfy their wants. C) Economics is the study of values a society should choose. D) Economics is the study of how to eliminate scarcity.
Answer: B
Diff: 1
Topic: 1.2 Defining Economics
AACSB: Analytic skills
Question Status: Previous Edition

4) In economic analysis, people's resources are
A) limited and their wants are unlimited.
B) unlimited and their wants are also unlimited.
C) limited and their wants are also limited.
D) unlimited and their wants are...
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