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Test Bank For Principles of Economics Arab World, 4th Edition by Gregory Mankiw, Mohamed Rashwan. Isbn. 9781473774926.

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Test Bank Principles of Economics Arab World, 4th Edition by Gregory Mankiw, Mohamed Rashwan. Isbn. 9781473774926. Principles of Economics Arab World 4e test bank. Gregory Mankiw 4e test bank for Principles of Economics. Table of Contents-=Part I. Introduction 1. Ten principles of economics 2. ...

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economics test bank
4th edition
gregory mankiw
mohamed rashwan
principles of economics test bank
principles of economics arab world test bank
gregory mankiw 4e test bank

Institution International Economics
Course International Economics

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TEST BANK Principles of Economics Arab World 4th Edition
Gregory Mankiw

Chapter 1 Ten Principles of Economics

MULTIPLE CHOICE

INTRODUCTION

1. The word “economy” comes from the Greek word oikonomos, which means
a. “environment.”
b. “production.”
c. “one who manages a household.”
d. “one who makes decisions.”
ANS: C PTS: 1 DIF: 1 REF: 1-0

2. Resources are
a. scarce for households but plentiful for economies.
b. plentiful for households but scarce for economies.
c. scarce for households and scarce for economies.
d. plentiful for households and plentiful for economies.
ANS: C PTS: 1 DIF: 1 REF: 1-0

3. Economics deals primarily with the concept of
a. scarcity.
b. money.
c. poverty.
d. banking.
ANS: A PTS: 1 DIF: 1 REF: 1-0

4. The overriding reason why households and societies face many decisions is that
a. resources are scarce.
b. goods and services are not scarce.
c. incomes fluctuate with business cycles.
d. people, by nature, tend to disagree.
ANS: A PTS: 1 DIF: 2 REF: 1-0

5. The phenomenon of scarcity stems from the fact that
a. most economies’ production methods are not very good.
b. in most economies, wealthy people consume disproportionate quantities of goods and
services.
c. governments restrict production of too many goods and services.
d. resources are limited.
ANS: D PTS: 1 DIF: 2 REF: 1-0

, 2

6. Approximately what percentage of the world's economies experience scarcity?
a. 10 percent
b. 40 percent
c. 85 percent
d. 100 percent
ANS: D PTS: 1 DIF: 1 REF: 1-0

7. When a society cannot produce all the goods and services people wish to have, it is said that the economy
is experiencing
a. scarcity.
b. surpluses.
c. inefficiencies.
d. inequalities.
ANS: A PTS: 1 DIF: 2 REF: 1-0

8. Oil is considered to be a non-renewable energy source. Oil
a. is an unlimited resource.
b. is a scarce resource.
c. is not a productive resource.
d. has no opportunity cost.
ANS: B PTS: 1 DIF: 1 REF: 1-0

HOW PEOPLE MAKE DECISIONS
1. The principle that "people face trade-offs" applies to
a. individuals.
b. families.
c. societies.
d. All of the above are correct.
ANS: D PTS: 1 DIF: 1 REF: 1-1

2. Guns and butter are used to represent the classic societal trade-off between spending on
a. durable and nondurable goods.
b. imports and exports.
c. national defense and consumer goods.
d. law enforcement and agriculture.
ANS: C PTS: 1 DIF: 1 REF: 1-1

, 3

3. When society requires that firms reduce pollution, there is
a. a trade-off because of reduced incomes to the firms' owners and workers.
b. a trade-off only if some firms are forced to close.
c. no trade-off, since the cost of reducing pollution falls only on the firms affected by the
requirements.
d. no trade-off, since everyone benefits from reduced pollution.
ANS: A PTS: 1 DIF: 3 REF: 1-1

4. Economists use the word equality to describe a situation in which
a. each member of society has the same income.
b. each member of society has access to abundant quantities of goods and services,
regardless of their income.
c. society is getting the maximum benefits from its scarce resources.
d. society's resources are used efficiently.
ANS: A PTS: 1 DIF: 2 REF: 1-1

5. Efficiency means that
a. society is conserving resources in order to save them for the future.
b. society's goods and services are distributed equally among society's members.
c. society's goods and services are distributed fairly, though not necessarily equally, among
society's members.
d. society is getting the maximum benefits from its scarce resources.
ANS: D PTS: 1 DIF: 1 REF: 1-1

6. When the government attempts to improve equality in an economy the result is often
a. an increase in overall output in the economy.
b. additional government revenue since overall income will increase.
c. a reduction in equality.
d. a reduction in efficiency.
ANS: D PTS: 1 DIF: 2 REF: 1-1

7. A likely effect of government policies that redistribute income and wealth from the wealthy to those on low
incomes is that those policies
a. enhance equality.
b. reduce efficiency.
c. reduce the reward for working hard.
d. All of the above are correct.
ANS: D PTS: 1 DIF: 2 REF: 1-1

, 4

8. The opportunity cost of an item is
a. the number of hours needed to earn money to buy the item.
b. what you give up to get that item.
c. usually less than the dollar value of the item.
d. the dollar value of the item.
ANS: B PTS: 1 DIF: 1 REF: 1-1

9. A student spends an hour studying instead of watching TV with their friends. The opportunity cost to them
of studying is
a. the improvement in their grades from studying for the hour.
b. the improvement in their grades from studying minus the enjoyment of watching TV.
c. the enjoyment they would have received if they had watched TV with their friends.
d. zero. Since they chose to study rather than to watch TV, the value of studying must have
been greater than the value of watching TV.
ANS: C PTS: 1 DIF: 3 REF: 1-1

10. A rational decision maker
a. ignores marginal changes and focuses instead on “the big picture.”
b. ignores the likely effects of government policies when making choices.
c. takes an action only if the marginal benefit of that action exceeds the marginal cost of that
action.
d. takes an action only if the combined benefits of that action and previous actions exceed the
combined costs of that action and previous actions.
ANS: C PTS: 1 DIF: 2 REF: 1-1

11. Selma eats two bananas during a particular day. The marginal benefit she enjoys from eating the second
banana
a. can be thought of as the total benefit she enjoys by eating two bananas minus the total
benefit she would have enjoyed by eating just the first banana.
b. determines her marginal cost of the first and second banana.
c. does not depend on how many bananas she has already eaten.
d. All of the above are correct.
ANS: A PTS: 1 DIF: 3 REF: 1-1

12. Suppose the cost of operating a 100-room hotel for a night is $10,000 and there are five empty rooms for
tonight. If the marginal cost of operating one room for one night is $30 and a customer is willing to pay $60
for the night, the hotel manager should
a. rent the room because the marginal benefit exceeds the marginal cost.
b. rent the room because the marginal benefit exceeds the average cost.
c. not rent the room because the marginal benefit is less than the marginal cost.
d. not rent the room because the marginal benefit is less than the average cost.
ANS: A PTS: 1 DIF: 2 REF: 1-1

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Exam (elaborations)

Test Bank For Principles of Economics Arab World, 4th Edition by Gregory Mankiw, Mohamed Rashwan. Isbn. 9781473774926.

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