Test Resuelto Cap 1 Microeconomia Krugman

Microeconomics 2e, Self-Test Quizzes Ch01 completed
Total score: 15 out of 20, 75%

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1. With which one of the following statements would economists be most likely to disagree?
a. People respond to incentives.
b. Making a choice involves an opportunity cost.
c. Markets move towards equilibrium.
d. Resources and inputsused in production are unlimited.

1 out of 1
Correct. Inputs used in production such as labor and natural resources have finite amounts available.

2. Macroeconomics is the branch of economics studying:
a. how prices are determined.
b. why trade-offs exist.
c. how decisions are made at the margin.
d. fluctuations in the overall level of business activity.

0 out of 1
Incorrect. Theups and downs in economic activity are the focal point of macroeconomic theory.

3. Economists generally agree that people are most likely to change their behavior when they:
a. are asked to do so voluntarily.
b. are given incentives to do so.
c. live in a world without scarcity.
d. live in a world without opportunity costs.

1 out of 1
Correct. Economists assume that people willsystematically act in ways to make themselves better off.

4. With which one of the following statements would economists be most likely to agree?
a. When transactions occur voluntarily, the seller gains and the buyer loses.
b. Market economies generate economic growth, but they do not promote efficiency.
c. People usually exploit opportunities to make themselves better off.
d. If people makewise decisions, they can avoid incurring any opportunity cost.

1 out of 1
Correct. The assumption that individuals seek to promote their own best interest is a cornerstone of economic theory.

5. Most individuals choose careers in which they specialize in producing only one type of good or service, yet as consumers they have access to a wide variety of goods and services. What principle allowsfor this?
a. trade
b. equity
c. scarcity
d. opportunity cost

1 out of 1
Correct. The efficiency of market economies derives from the fact that the great arena of trade allows for fine degrees of specialization.

6. In his book The Wealth of Nations, Adam Smith used the example of pin-making to illustrate the advantages of:
a. equity.
b. specialization.
c. marginal analysis.
d.interaction of choices.

1 out of 1
Correct. Smith described the advantages of an assembly-line production method over the practice of one craftsman making each individual item from start to finish.

7. An opportunity cost arises:
a. only when a monetary cost is incurred.
b. only when a time cost is incurred.
c. only when the wrong decision is made.
d. whenever any choice is made.

1out of 1
Correct. The opportunity cost resides in the forgone alternative.

8. Exchanges taking place in a market system:
a. are voluntary.
b. are inefficient.
c. will benefit one party at the expense of another.
d. are monitored by the government to ensure that scarce resources are being used wisely.

0 out of 1
Incorrect. Market exchanges occur when both parties expect to benefit.9. The condition of scarcity means that:
a. when the government produces something, there is no opportunity cost.
b. choices must be made in the allocation of productive resources.
c. you will not incur an opportunity cost if you make the right choice.
d. only a command economy can make efficient use of resources.

1 out of 1
Correct. Scarcity arises from the fact that the naturallyoccurring amount of productive resources is less than the amount we can make use of.

10. The purpose of an economic system is to:
a. eliminate scarcity.
b. protect the environment.
c. allocate scarce resources.
d. create an equal distribution of wealth.

0 out of 1
Incorrect. In a command economy, the allocation decisions are make by a central authority. In a market economy, they are made...