1 Chapter 1-6 MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answ ers the question. 1) Which of the following is the best definition of economics? A) the study of choices made by people who are faced with scarcity B) the study of how consumers spend their income C) the study of how business firms decide what inputs to hire and what outputs to produce D) the study of how the federal government allocates tax dollars 2) The choice of the distribution of products means answering the question(s) of: A) what products to produce. B) how to produce the products. C) who consumes the products. D) both how to produce and who consumes the products. 3) Which of the following is a normative statement? A) Health care costs too much. B) Pharmaceutical companies earn profits from the sale of prescription drugs. C) Hospitals are under increasing pressure to cut costs. D) all of the above 4) Economists make certain assumptions in order to: A) focus attention on what really matters. B) come up with simple answers for complicated questions. C) avoid addressing the most difficult part of the problems they deal with. D) distract attention from what really matters. 5) Economists use the phrase "ceteris paribus" to express the assumption: A) "other things being equal." B) "everything affects everything else." C) "scarcity is a fact of life." D) "there is no such thing as a free lunch." 6) Which of the following is a marginal question? A) If I buy a used laptop computer instead of a new one, how much money do I save? B) If I play the lottery, what are my chances of winning? C) If I find a job, how much would I have to pay in social security taxes? D) If I skip...
