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Microeconomics, 7e (Pindyck/Rubinfeld)
Chapter 1 Preliminaries
1) Microeconomics is the branch of economics that deals with which of the following topics?
A) The behavior of individual consumers
B) Unemployment and interest rates
C) The behavior of individual firms and investors
D) B and C
E) A and C
Answer: E
Diff: 1
Section: 1.1
2) A Rolling Stones song goes: "You can't always get what you want." This echoes an
important theme from microeconomics. Which of the following statements is the best example
of this theme?
A) Consumers must make the best purchasing decisions they can, given their limited incomes.
B) Workers do not have as much leisure as they would like, given their wages and working
conditions.
C) Workers in planned economies, such as North Korea, do not have much choice over jobs.
D) Firms in market economies have limited financial resources.
Answer: A
Diff: 1
Section: 1.1
3) Economics is about the allocation of scarce resources. Which of the following is NOT an
example of economic scarcity?
A) If Steve goes to see the movie Master and Commander on Saturday, he will not be able to
afford buying ice cream.
B) If Jenny studies for her economics quiz this evening, she will not have time to walk her dog.
C) If General Motors increases its production of SUVs this year, it will have to spend more on
advertising.
D) If Borders Books increases the number of titles it carries, it will have to reallocate shelf space
to accommodate the new titles.
Answer: C
Diff: 2
Section: 1.1
Page 1
Copyright © 2009 Pearson Education, Inc.
10) Which of the following statements is false? An economic analysis of carbon taxes can:
A) calculate the increase in costs faced by coal-using industries.
B) predict the effect on unemployment in West Virginia coal mining communities.
C) compare the likely reductions in medical expenditures on diseases caused by smog.
D) present a trade-off of the costs and benefits of different levels of carbon taxes.
E) conclude that such taxes should be imposed to benefit future generations.
Answer: E
Diff: 1
Section: 1.1
Page 3
Copyright © 2009 Pearson Education, Inc.
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Naturalization and Allegiance.
DEMOCRATIC. REPUBLICAN.
DEMOCRATIC. REPUBLICAN.
Honest reform in the Civil Service The men who abandoned the
has been inaugurated and Republican party in 1884 and continue
maintained by President Cleveland, to adhere to the Democratic party have
and he has brought the public service deserted not only the cause of honest
to the highest standard of efficiency, government, of sound finance, of
not only by rule and precept, but by freedom and purity of the ballot, but
the example of his own untiring and especially have deserted the cause of
unselfish administration of public reform in the civil service. We will not
affairs. fail to keep our pledges because they
have broken theirs or because their
candidate has broken his. We therefore
repeat our declaration of 1884, to wit:
“The reform of the Civil Service,
auspiciously begun under the
Republican administration should be
completed by the further extension of
the reform system already established
by law to all the grades of the service to
which it is applicable. The spirit and
purpose of the reform should be
observed in all executive appointments,
and all laws at variance with the object
of existing reform legislation should be
repealed, to the end that the dangers to
free institutions which lurk in the
power of official patronage may be
wisely and effectively avoided.”
Pensions, Etc., 1888.
DEMOCRATIC. REPUBLICAN.
While carefully guarding the interest The gratitude of the nation to the
to the principles of justice and equity, defenders of the Union cannot be
it has paid out more for pensions and measured by laws. The legislation of
bounties to the soldiers and sailors of Congress should conform to the pledge
the Republic than was ever paid out made by a loyal people, and be so
during an equal period. enlarged and extended as to provide
against the possibility that any man
who honorably wore the Federal
uniform shall become an inmate of an
almshouse, or dependent upon private
charity. In the presence of an
overflowing treasury it would be a
public scandal to do less for those
whose valorous service preserved the
Government. We denounce the hostile
spirit shown by President Cleveland in
his numerous vetoes of measures for
pension relief, and the action of the
Democratic House of Representatives
in refusing even a consideration of
general pension legislation.
DEMOCRATIC. REPUBLICAN.