Test Bank for Macroeconomics 8th Edition Glenn Hubbard, Anthony Patrick O'Brien Chapter 1-18 Macroeconomics Digital Update, 8.1e (Hubbard/O'Brien) Chapter 1 Economics: Foundations and Models 1.1
Three Key Economic Ideas
1) Suppose that the Biden administration is successful in implementing a strengthened "Buy American" policy that would require the goods and services purchased by the federal government to be made in the United States, and U.S. manufacturing firms decide to expand domestic production and employment. This would be an example of the U.S. manufacturing firms reacting to which of the three key economic ideas? A) Firms attempt to maximize revenues. B) Optimal decisions are made at the margin. C) Firms are allocatively efficient. D) People respond to economic incentives. Answer: D Diff: 2 Topic: Scarcity Learning Outcome: Micro-1: Identify the basic principles of economics and explain how to think like an economist AACSB: Analytical thinking Special Feature: Chapter Opener: Does Apple Manufacture the iPhone in the United States?
2) The study of economics arises due to A) money. B) scarcity. C) greed. D) resources. Answer: B Diff: 1 Topic: Scarcity *: Recurring Learning Outcome: Micro-1: Identify the basic principles of economics and explain how to think like an economist AACSB: Analytical thinking
3) Scarcity refers to the situation in which A) unlimited wants exceed limited resources. B) unlimited resources exceed limited wants. C) a country's population is larger than its resource base. D) a nation's poverty level increases faster than its population. Answer: A Diff: 1 Topic: Scarcity *: Recurring Learning Outcome: Micro-1: Identify the basic principles of economics and explain how to think like an economist AACSB: Analytical thinking
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