Chapter 1 - The Role and Method of Economics Scenario Page 1 Exploring MACROeconomics 5th CANADIAN Edition Sexton Test Bank
True / False
1.The main concern of economics is to study how well the stock markets are performing.
- True
- False
ANSWER: False
2.Economics has much in common with sociology because it is concerned with how societies organize themselves.However, economics shares little in common with political science, psychology, or anthropology.
- True
- False
ANSWER: False
3.One topic that microeconomics explores is how prices are determined in individual markets, while macroeconomics is concerned with issues such as the economy's overall rate of inflation, economic growth, and unemployment.
- True
- False
ANSWER: True
4.Macroeconomics is the branch of economics in which you study inflation and unemployment in the economy.
- True
- False
ANSWER: True
5.Macroeconomics explores the allocation of scarce resources from the perspective of small economic units such as consumers and firms.
- True
- False
ANSWER: False
6.Economic theories are of limited use since they cannot be tested empirically.
- True
- False
ANSWER: False
7.A hypothesis is a positive statement.
- True 1 / 4
Chapter 1 - The Role and Method of Economics Scenario Page 2 Exploring MACROeconomics 5th CANADIAN Edition Sexton Test Bank
- False
ANSWER: True
8.An untestable proposition that guesses how people will react to changed circumstances is called a hypothesis.
- True
- False
ANSWER: False
9.A good economic theory should capture as many details about real-world behaviour as possible.
- True
- False
ANSWER: False
10.Economists typically use controlled experiments to learn about how the economy functions.
- True
- False
ANSWER: False
11.Ceteris paribus is a Latin expression that means "holding nothing constant."
- True
- False
ANSWER: False
12.Correlation is when one event causes another to occur.
- True
- False
ANSWER: False
13.The fallacy of composition states that even if something is true for an individual, it is not necessarily true for many individuals as a group.
- True
- False
ANSWER: True
14.Normative analysis focuses on statements that can be tested against real-world data.
- True
- False 2 / 4
Chapter 1 - The Role and Method of Economics Scenario Page 3 Exploring MACROeconomics 5th CANADIAN Edition Sexton Test Bank
ANSWER: False
15.To be a positive economic statement, an assertion must be factual.
- True
- False
ANSWER: False
16."A tax cut will lead to higher inflation" is an example of a normative economic statement.
- True
- False
ANSWER: False
17.Most disagreements among economists stem from positive issues.
- True
- False
ANSWER: False
18.Tractors, shovels, copy machines, and computer programming expertise are all examples of scarce resources.
- True
- False
ANSWER: True
19.Since resources are abundant, we do not have to make choices about their use.
- True
- False
ANSWER: False
20.Human capital consists of computers, tools, and equipment owned by private individuals.
- True
- False
ANSWER: False
21.An entrepreneur organizes the other factors of production and bears the business risk.
- True
- False
ANSWER: True 3 / 4
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Chapter 1 - The Role and Method of Economics Scenario 22.Page 4
Scarcity is a problem faced by all but the wealthiest of citizens.
- True
- False
ANSWER: False
23.If Tanya gives up a job in which she earns $34 000 per year in order to go to college full-time, her forgone income is part of the opportunity cost of going to college.
- True
- False
ANSWER: True
24.The opportunity cost of a decision is the value of the best forgone alternative.
- True
- False
ANSWER: True
25.The opportunity cost of a decision is the sum of the value of all of the available alternatives that were not chosen.
- True
- False
ANSWER: False
26.The opportunity cost of attending college is likely higher for a high-school graduate who leaves a job grilling hamburgers than it is for a high-school dropout who leaves a job working as a computer network administrator.
- True
- False
ANSWER: False
27.Rational individuals act to advance their own self-interest; therefore, charitable giving must constitute irrational behaviour.
- True
- False
ANSWER: False
28.Marginal cost is the additional cost incurred as the result of producing one additional unit of a good or service.
- True
- False
ANSWER: True
- / 4