Test Bank for The Economy Today Bradley Schiller 15th edition

Test Bank for The Economy Today Bradley Schiller 15th edition

The Economy Today, 15e (Schiller) Chapter 3   Supply and Demand 

1) Who participates in markets?

A) Business firms.

B) Business firms and consumers.

C) Consumers and government agencies.

D) All of the choices are correct.

Answer:  D

Explanation:  Consumers, business firms, government agencies, and foreigners participate in the marketplace.

Difficulty: 2 Medium

Topic:  Market Participants

Learning Objective:  03-03 How market prices and quantities are established.

Bloom’s:  Understand

AACSB:  Reflective Thinking

Accessibility:  Keyboard Navigation

2) The goal of the consumer in a market economy is to use his or her limited income to buy

A) The greatest number of goods and services possible.

B) The goods and services that maximize profits for businesses.

C) Those goods and services with the lowest prices.

D) The set of goods and services that maximizes the consumer’s total utility.

Answer:  D

Explanation:  Consumers are motivated by their desire to maximize utility.

Difficulty: 2 Medium

Topic:  Market Participants

Learning Objective:  03-03 How market prices and quantities are established.

Bloom’s:  Understand

AACSB:  Reflective Thinking

Accessibility:  Keyboard Navigation

3) The goal of the business firms in a market economy is to maximize

A) Total profits.

B) Total sales.

C) Total utility.

D) Total welfare.

Answer:  A

Explanation:  Businesses are motivated by profit.

Difficulty: 2 Medium

Topic:  Market Participants

Learning Objective:  03-03 How market prices and quantities are established.

Bloom’s:  Understand

AACSB:  Reflective Thinking

Accessibility:  Keyboard Navigation

4) People benefit by participating in the market because

A) Resources are no longer limited.

B) There are always participants in the market that are more efficient than you are in production.

C) Market participation allows individuals to specialize and, with trade, ultimately consume more.

D) Participants in the market do not have to make choices.

Answer:  C

Explanation:  Consumers’ limited time, energy, resources, and ability to produce all things lead us to specialize and exchange goods with others who can produce a good at a lower opportunity cost. This ultimately increases how much we can consume.

Difficulty: 2 Medium

Topic:  Market Participants

Learning Objective:  03-03 How market prices and quantities are established.

Bloom’s:  Understand

AACSB:  Reflective Thinking

Accessibility:  Keyboard Navigation

5) Which of the following is a market transaction?

A) A stock increases in value over the 30 years that it is owned.

B) A college student purchases a laptop computer.

C) Weather destroys a farmer’s crops, leaving the farmer unable to buy groceries.

D) A radio station changes its programming from classical to rock.

Answer:  B

Explanation:  A market transaction involves an exchange of either barter or currency for goods or resources.

Difficulty: 3 Hard

Topic:  The Circular Flow

Learning Objective:  03-03 How market prices and quantities are established.

Bloom’s:  Analyze

AACSB:  Analytical Thinking

Accessibility:  Keyboard Navigation

6) A factor market is any place or process where

A) Finished goods are bought and sold.

B) Land, labor, or capital is bought and sold.

C) Finished services are bought and sold.

D) None of the choices are correct.

Answer:  B

Explanation:  A factor market is where the factors of production (land, labor, or capital) are bought and sold.

Difficulty: 1 Easy

Topic:  The Circular Flow

Learning Objective:  03-03 How market prices and quantities are established.

Bloom’s:  Remember

AACSB:  Reflective Thinking

Accessibility:  Keyboard Navigation

7) Which of the following is purchased in a product market?

A) Cell phone service.

B) Undeveloped farmland in Texas.

C) Crude oil.

D) The skills of an X-ray technician.

Answer:  A

Explanation:  A product market is where finished goods and services are bought and sold. Cell phone service is a finished product.

Difficulty: 3 Hard

Topic:  The Circular Flow

Learning Objective:  03-03 How market prices and quantities are established.

Bloom’s:  Apply

AACSB:  Analytical Thinking

Accessibility:  Keyboard Navigation

8) Which of the following is purchased in a factor market?

A) A bag of jellybeans.

B) National defense.

C) The labor of a state university professor.

D) A motorized scooter used for commuting by a student.

Answer:  C

Explanation:  A factor market is where the factors of production, in this case labor, are bought and sold.

Difficulty: 3 Hard

Topic:  The Circular Flow

Learning Objective:  03-03 How market prices and quantities are established.

Bloom’s:  Apply

AACSB:  Analytical Thinking

Accessibility:  Keyboard Navigation

9) Business firms supply goods and services to ________ and purchase factors of production in ________.

A) factor markets; product markets

B) national markets; factor markets

C) product markets; factor markets

D) factor markets; national markets

Answer:  C

Explanation:  A factor market is where the factors of production (land, labor, or capital) are bought and sold. A product market is where finished goods and services are bought and sold. A pair of shoes is a finished good.

Difficulty: 2 Medium

Topic:  The Circular Flow

Learning Objective:  03-03 How market prices and quantities are established.

Bloom’s:  Understand

AACSB:  Reflective Thinking

Accessibility:  Keyboard Navigation

10) Individual consumers supply ________ and purchase ________.

A) factors of production; final goods and services

B) intermediate goods; final goods and services

C) final goods and services; factors of production

D) national goods and services; factors of production

Answer:  A

Explanation:  Individual consumers supply factors of production such as their own labor and purchase final goods and services such as groceries.

Difficulty: 2 Medium

Topic:  The Circular Flow

Learning Objective:  03-03 How market prices and quantities are established.

Bloom’s:  Understand

AACSB:  Reflective Thinking

Accessibility:  Keyboard Navigation

Test Bank for “The Economy Today,” 15th Edition by Bradley Schiller

Overview: The Economy Today, 15th Edition by Bradley Schiller is a comprehensive textbook that explores fundamental economic principles and contemporary economic issues. The test bank for this edition provides a range of assessment tools designed to evaluate students’ understanding of economic concepts and their ability to apply these concepts to real-world scenarios.

Content Details:

1. Introduction to Economics:
   • Basic Economic Concepts: Covers fundamental concepts such as scarcity, opportunity cost, and the role of economics in decision-making.
   • Economic Models: Introduction to economic models and their application in analyzing real-world problems.
2. Supply and Demand:
   • Market Mechanisms: Examination of supply and demand principles, market equilibrium, and the effects of shifts in supply and demand on prices and quantities.
   • Elasticity: Analysis of price elasticity of demand and supply, and its implications for consumers and producers.
3. Consumer Behavior:
   • Utility Theory: Explores consumer preferences, utility maximization, and budget constraints.
   • Demand Curves: Study of how changes in income and prices affect consumer demand.
4. Production and Costs:
   • Production Theory: Analysis of production functions, short-run and long-run production, and economies of scale.
   • Cost Analysis: Covers various cost concepts including total, average, and marginal costs, and their impact on business decisions.
5. Market Structures:
   • Types of Market Structures: Overview of perfect competition, monopoly, monopolistic competition, and oligopoly.
   • Pricing Strategies: Examination of pricing and output decisions in different market environments.
6. Factor Markets:
   • Labor and Capital Markets: Analysis of labor markets, wage determination, and capital markets.
   • Income Distribution: Discussion of income distribution and factors influencing wage and rental rates.
7. Market Failures and Government Intervention:
   • Externalities and Public Goods: Examination of market failures, including externalities and the provision of public goods.
   • Government Role: Analysis of government intervention aimed at correcting market failures and promoting economic efficiency.
8. Macroeconomic Principles:
   • Economic Indicators: Introduction to key macroeconomic indicators such as GDP, inflation, and unemployment.
   • Fiscal and Monetary Policy: Overview of fiscal and monetary policies and their impact on economic stability and growth.
9. International Economics:
   • Trade and Globalization: Discussion of international trade theories, trade policies, and the effects of globalization.
   • Exchange Rates and Trade: Examination of exchange rates, trade balances, and their impact on the economy.
10. Economic Growth and Development:
    • Growth Theories: Analysis of theories of economic growth and development.
    • Development Issues: Discussion of challenges related to economic development, including poverty and inequality.

Interactive Features of the Test Bank:

• Multiple-Choice Questions: Assess comprehension of core economic concepts and theories.
• True/False Questions: Test basic understanding and definitions.
• Short Answer Questions: Encourage concise explanations and deeper understanding of economic issues.
• Problem-Solving Questions: Provide scenarios to apply economic theories and problem-solving skills.
• Essay Questions: Facilitate in-depth analysis of complex economic topics and policy issues.

Conclusion:

The test bank for The Economy Today, 15th Edition by Bradley Schiller is an essential resource for educators and students. It offers a diverse set of questions that enhance understanding and application of economic principles. By providing a thorough assessment of key concepts and real-world applications, this test bank supports effective learning and evaluation in the study of economics.