TEST BANK AND SOLUTIONS FOR PRINCIPLES
OF ECONOMICS RELEASE 8TH EDITION BY
ROBERT H. FRANK|QUESTIONS AND ANSWER
KEY|2024
Student name:
1) Economics is best defined as the study of
A) inflation, interest rates, and the stock market.
B) supply and demand.
C) how people make choices in the face of scarcity and the implications of those
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choicesfor society as a whole.
D) the financial concerns of businesses and individuals.
2) Economics is best defined as the study of
A) the financial concerns of businesses and individuals.
B) the role of government in limiting the choices people make.
C) choice in the face of limited resources.
D) whether we will have enough resources in the future.
3) Economists recognize that because people have limited resources
A) government intervention is necessary.
B) they have to make trade-offs.
C) they will never be happy.
D) our future is bleak.
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4) The Scarcity Principle states that
A) people don't have enough money to buy what they want.
B) society will eventually run out of resources.
C) with limited resources, having more of one thing means having less of another.
D) some countries have fewer resources than others.
5) An implication of scarcity is that
A) people will never be happy.
B) making trade-offs becomes unnecessary as wealth increases.
C) some people will always be poor.
D) people must make trade-offs.
6) If all the world's resources were to magically increase one hundredfold, then
A) people would still have to make trade-offs.
B) economics would no longer be relevant.
C) scarcity would disappear.
D) trade-offs would become unnecessary.
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7) The Scarcity Principle applies to
A) poor people primarily.
B) consumers primarily.
C) firms primarily.
D) everyone.
8) Forest lives in complete isolation in Montana. He is self-sufficient and feeds
himself through hunting, fishing, and farming. Which of the following statements about
Forest is true?
A) Forest has unlimited resources.
B) Forest is not required to make trade-offs because he is self-sufficient.
C) Forest has to make trade-offs.
D) Forest doesn't have to consider costs and benefits.
9) The Scarcity Principle applies to
A) all decisions.
B) only market decisions, e.g., buying a car.
C) only non-market decisions, e.g., watching a sunset.
D) only the poor.
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