Test Bank for ECON MICRO, 7th Edition by William A. McEachern All Chapters || Complete Guide A+

Page 1 TEST BANK Test Bank for ECON MICRO, 7th Edition Page 2 William A.: Econ Micro Chapter 01 Indicate whether the statement is true or false. 1. Resources consist of labor and natural resources. True False ANSWER: False 2. The ceteris paribus assumption is the other -things -constant assumption. True False ANSWER: True 3. Scarcity occurs when the amount people desire is less than the amount available at a zero price. True False ANSWER: False 4. Resources are used only in the production of goods, not services. True False ANSWER: False 5. "There should be less discrimination against women" is an example of a positive economic statement. True False ANSWER: False 6. College graduates with history or literature as their major tend to earn more than those who choose more quantitative disciplines like economics. True False ANSWER: False 7. The fallacy of composition is the error of believing that a cause -and-effect relationship exists between two events that are associated in time. True False ANSWER: False Name: Class: Date: Chapter 01 ECON Micro7e 8. A marginal adjustment refers only to a minor change. a. True b. False Page 3 ANSWER: False 9. Rational self-interest is equivalent to pure selfishness. True False ANSWER: False 10. "An increase in the price of cheese causes consumers to purchase more cheese" is an example of a positive economic statement. True False ANSWER: True 11. Labor and capital are exchanged in the resource market. True False ANSWER: True 12. Labor is the physical and mental effort used to produce goods and services. True False ANSWER: True 13. An economist would classify 500 shares of stock in General Mills, Inc. as capital. True False ANSWER: False 14. A good economic theory brings clarity to chaos. True False ANSWER: True 15. The ceteris paribus assumption is a behavioral assumption. True False ANSWER: False Name: Class: Date: Chapter 01 ECON Micro7e 16. It is always rational to acquire more information before making a decision. a. True b. False Page 3 ANSWER: True 17. Most economists consider a theory a good one if it predicts well. True False ANSWER: True 18. A rational individual would make charitable contributions only if such contributions receive favorable tax treatment. True False ANSWER: False 19. Economics is as much an art as it is a science. True False ANSWER: True 20. Economic choice results from scarcity. True False ANSWER: True 21. A rational decision maker compares the expected marginal cost to the expected marginal benefit of any activity. True False ANSWER: True 22. Most real economic choices involve small (or marginal) changes rather than all-or-nothing decisions. True False ANSWER: True 23. Profit is the payment made for land resources. True False ANSWER: False