Test Bank For The Exploration of Economics International Edition 4th Edition by Robert L. Sexton

Test Bank For The Exploration of Economics International Edition 4th Edition by Robert L. Sexton

Chapter 3—Scarcity, Trade-Offs and Economic Growth

TRUE/FALSE

1.In a market economy, government officials make most production decisions in a centralized manner.

ANS: F PTS: 1

2.Consumer sovereignty means that consumers vote with their dollars in a market economy, which helps determine what is produced.

ANS: T PTS: 1

3.In a market economy, prices help determine the distribution of goods and services but not the allocation of resources.

ANS: F PTS: 1

4.There are four factors of production: land, labor, capital, and entrepreneurship.

ANS: T PTS: 1

5.Capital-intensive production techniques tend to be utilized most commonly in countries where labor is relatively cheap.

ANS: F PTS: 1

6.High wage countries like the United States tend to use less labor-intensive production methods than low wage countries like Mexico.

ANS: T PTS: 1

7.An economy that has many unemployed workers and idle factories is not operating efficiently.

ANS: T PTS: 1

8.The production possibilities curve marks the boundary between attainable and unattainable combinations of output.

ANS: T PTS: 1

9.Any output combination outside the production possibilities curve is attainable in the current period only if prices decrease.

ANS: F PTS: 1

10.A decrease in the unemployment rate will shift an economy’s production possibilities curve outward.

ANS: F PTS: 1

11.An increase in available resources will tend to cause a society’s production possibilities curve to shift inward.

ANS: F PTS: 1

12.An improvement in technology will tend to cause a society’s production possibilities curve to shift outward.

ANS: T PTS: 1

13.The opportunity cost of a particular good tends to increase with its rate of output because some resources cannot be easily adapted from the production of one good or service to another.

ANS: T PTS: 1

14.The production possibilities curve for an economy that experiences a constant opportunity cost of production is linear (a straight line).

ANS: T PTS: 1

15.The law of increasing opportunity costs implies that a society’s production possibilities curve will be a straight line.

ANS: F PTS: 1

16.Movement from one point on the production possibilities curve to another leads to more of both goods being produced.

ANS: F PTS: 1

17.An increase in an economy’s capital stock increases its future productive capacity.

ANS: T PTS: 1

18.Other things being constant, an economy must give up some consumer goods and services today to produce more capital goods in order to grow.

ANS: T PTS: 1

19.Capital accumulation causes the production possibilities curve to shift inward over time.

ANS: F PTS: 1

20.High economic growth can eventually eliminate the problem of scarcity.

ANS: F PTS: 1

Test Bank for “The Exploration of Economics,” International Edition, 4th Edition by Robert L. Sexton

Overview: The Exploration of Economics, 4th Edition by Robert L. Sexton provides an accessible introduction to economic principles and concepts. This edition emphasizes both theoretical understanding and practical application, helping students grasp fundamental economic ideas and their relevance to real-world situations. The accompanying test bank is an essential resource for evaluating students’ grasp of the material, offering a range of questions to test their knowledge and analytical skills.

Content Details:

1. Introduction to Economics:
   • Basic Concepts: Introduces key economic concepts such as scarcity, opportunity cost, and economic systems.
   • Role of Economics: Explains the importance of economics in analyzing and solving societal issues related to resource allocation.
2. Supply and Demand:
   • Market Mechanics: Covers the laws of supply and demand, market equilibrium, and the effects of shifts in supply and demand on prices and quantities.
   • Elasticity: Examines price elasticity of demand and supply, and its impact on consumer and producer behavior.
3. Consumer Behavior:
   • Utility Theory: Discusses the concept of utility, consumer choice, and how preferences influence decision-making.
   • Budget Constraints: Analyzes how consumers make choices within their budget constraints and the impact on demand curves.
4. Production and Costs:
   • Production Functions: Explores the relationship between inputs and outputs, including short-run and long-run production functions.
   • Cost Analysis: Discusses various cost concepts such as total, average, and marginal costs, and their implications for business decisions.
5. Market Structures:
   • Types of Markets: Provides an overview of different market structures including perfect competition, monopoly, monopolistic competition, and oligopoly.
   • Pricing Strategies: Examines pricing strategies and market outcomes in various market structures.
6. Factor Markets:
   • Labor and Capital Markets: Analyzes the determination of wages and rental rates, and the role of factor markets in the economy.
   • Income Distribution: Discusses factors affecting income distribution and economic inequality.
7. Market Failures and Government Intervention:
   • Externalities and Public Goods: Explores the causes of market failures such as externalities, public goods, and information asymmetries.
   • Government Policies: Discusses the role of government in addressing market failures and implementing economic policies.
8. Macroeconomic Principles:
   • Economic Indicators: Introduces key macroeconomic indicators including GDP, inflation, and unemployment rates.
   • Macroeconomic Policies: Covers fiscal and monetary policies, and their effects on the overall economy.
9. International Economics:
   • Trade Theories: Examines theories of international trade, trade policies, and their impact on global economics.
   • Global Finance: Discusses international finance, including exchange rates, trade balances, and financial markets.
10. Economic Growth and Development:
    • Growth Factors: Analyzes the factors contributing to economic growth and development.
    • Development Issues: Explores issues related to economic development, including poverty, inequality, and sustainability.

Interactive Features of the Test Bank:

• Multiple-Choice Questions: Test fundamental economic concepts and principles.
• True/False Questions: Assess basic understanding of economic theories and definitions.
• Short Answer Questions: Encourage detailed responses and deeper understanding of economic issues.
• Problem-Solving Questions: Provide practical scenarios for applying economic theories and solving real-world problems.
• Essay Questions: Allow for comprehensive analysis and discussion of complex economic topics and policy implications.

Conclusion:

The test bank for The Exploration of Economics, 4th Edition by Robert L. Sexton is a valuable tool for educators and students, offering a comprehensive range of questions to test and reinforce understanding of economic principles. By providing a variety of question types, the test bank supports students in mastering both theoretical and practical aspects of economics, preparing them for exams and real-world applications.