Test Bank for Exploring Macroeconomics 4th Canadian Edition by Sexton

Test Bank for Exploring Macroeconomics 4th Canadian Edition by Sexton 1. What is economics most concerned with? a. keeping interest rates low b. making money c. allocating scarce resources to satisfy unlimited wants d. governments’ efficient spending of tax revenues ANSWER:  c 2. What is the central concern of economics? a. regulating the stock market b. restraining people’s greed c. finding more resources to satisfy everyone's wants d. making the best use of scarce resources to satisfy our unlimited wants ANSWER:  d 3. Why is there scarcity? a. because marginal costs tend to exceed marginal benefits b. because human wants and needs are limited c. because Canada has too many people living in poverty d. because our unlimited wants exceed our limited resources ANSWER:  d 4. Why does the problem of scarcity exist? a. because resources are limited, relative to wants b. because governments fail to intervene in the marketplace c. because resources are unlimited, relative to wants d. because the world has many people living in poverty ANSWER:  a 5. What does scarcity result from? a. government decision making b. people NOT understanding economics c. wants that exceed the resources necessary to provide them d. an increase in globalization ANSWER:  c

6. What causes scarcity? a. the allocation of goods by prices b. specialization and division of labour c. unlimited wants and limited resources d. the market mechanism ANSWER:  c 7. What does economics primarily explore? a. how the government allocates its budget among competing political interests b. how stock and bond prices fluctuate in response to changes in demand or supply c. how goods and services are produced and distributed in a world with limited resources d. how businesses market products under competitive conditions ANSWER:  c 8. What does economics primarily study? a. how firms compete for profits in the marketplace b. how limited resources are allocated to satisfy unlimited wants c. how we deal with unemployed resources d. how prices are set in the marketplace ANSWER:  b 9. What do economists mean when they state that a good is scarce? a. People will want to buy more of the good regardless of price. b. It is impossible to expand the availability of the good. c. Our wants exceed our limited resources. d. There is a shortage of the good at a sale price. ANSWER:  c 10. Which of the following statements about scarcity is the most accurate? a. It occurs only in centrally planned economies. b. It will likely be eliminated by technological progress. c. It occurs when there are insufficient resources to provide for human wants. d. It exists only in poor nations. ANSWER:  c